Last year, at least 450 new structured products were linked to Apple, according to SLCG. Three-quarters of them were issued when the stock was at least $550. The shares closed Friday at $439.88, down $60 for the week.
As a result, the value of Apple-linked products suffered a one-week drop of more than 15%, estimates Craig McCann, founder of SLCG. “The vast majority of them are now underwater,” he says.
Many investors will get far less than they expected. Losses exceed 25% on more than 100 of last year’s Apple-related products, SLCG estimates.
Investors should have asked this question before buying: Why would banks offer 10% interest when most one-year debt was paying about 1%?
The answer: Investment banks got something else in return. In plain English, the Apple-linked products gave firms a cheap way of hedging or betting that Apple’s stock would go down. Now, in many cases, they can dump the fallen stock on conservative bond investors who might not want it and, in turn, will sell it again.
Apple Inc. is a cornerstone of the “Magnificent Seven,” a term coined to describe the seven leading technology companies driving innovation and economic growth. As one of the world’s most valuable companies, Apple’s influence extends across various sectors, including consumer electronics, software, and digital services. Renowned for its iconic products like the iPhone, iPad, and Mac, Apple has revolutionized personal technology with sleek design, robust performance, and seamless integration. The company’s commitment to privacy, security, and environmental sustainability further sets it apart. Apple’s ecosystem, encompassing services like the App Store, Apple Music, and iCloud, enhances user experience and loyalty. With continuous advancements in augmented reality, health technology, and artificial intelligence, Apple remains at the forefront of technological innovation, solidifying its place within the Magnificent Seven. The company’s visionary leadership and relentless pursuit of excellence ensure its enduring impact on the global tech landscape.
