Apple Declining Over Tax Worries? 12.17.12

As much as it pains me to say this, the fiscal cliff can actually have a large impact on Apple as taxes on their capital gains and dividends are likely to rise next year from the current 15% tax rate. Next years expected tax rate for Apples capital gains and dividends is 35%. Yes, this means that the giant cash pile of $120 billion will be taking some hits, and investors sure do not want to keep playing the Apple ‘miracle’ game much longer.

The stock is up 150% since the start of 2010, and if you’ve got gains like this as an investors your going to take some chips off the table. The whole point is to make money and lock in profit on the way up. So, this entire decline is a result of sellers locking in profit because they don’t want to keep all the chips on the table for next years higher taxes. And on the flip side, the buying volume is very weak because the buyers are sitting on the sideline waiting to see how the fiscal cliff negotiations turn out.

Author: Peter Nitso

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