Apple Stock Watch - Apple Moves Up On Education Announcements

by , 6:15 PM EDT, June 17th, 2002

Early Monday Activity

Apple jumped higher from the start on news of new products for the education market. After falling to a low of $18.11 in intra-day trading on Friday, Apple rebounded Monday morning on heavy volume, reaching a morning high of $20.63. The markets moved higher in early Monday trading after recording a fourth straight weekly decline on Friday. Traders dismissed last week's reports of slowing consumer spending. Tech stocks and consumer stocks joined in the early Monday rally.

Friday Trading

On Friday the markets tumbled on fears of slowing consumer spending and in response to the start of the quarterly warning season in which companies have a short time window to advise investors that revenues and earnings would fall below previously stated projects. After the markets closed on Thursday, Adobe Systems issued a revenue warning for the fiscal year. Adobe's warning caused a sell off in software stocks and put a damper on Friday's tech trading.

Monday Afternoon Activity

In afternoon trading the markets sustained their impressive advance. The Dow Jones Industrial Average finished up 213.21 points at 9,687.42, its best performance in weeks. The S&P 500 moved up 28.54 to end at 1,035.81. The NASDAQ Composite Index vaulted higher by more than three percent, leaping 48.55 to close at 1,553.29. Apple stepped $.44 higher on the day to finish at $20.54 with above-average volume.

Macs In Education

On Monday Apple announced an upgrade to its PowerSchool Student Information System software and new curriculum tools for educators. The announcements were made at the opening of the NECC conference in Texas. Apple is striving to maintain its number one position in American education against arch-rival Dell Computer. Today's announcements are intended to emphasize Apple's commitment to educations through leadership in software and solutions. Please join the discussion of Apple's activities in education in the newest MacObserver forum called An Apple A Day: Macs In Education.

Apple

Last week Apple acquired digital video composting products Chalice and Rayz from Silicon Grail. Commenting on Apple's purchase, Ray Feeney, Silicon Grail's founder mentioned the soft economic climate and the challenges faced by technology companies in the aftermath of the 9/11 attacks as the impetus for the sale. Apple, with more than $4.3 billion in cash, is prudently using its resources to acquire high-end digital video technologies at a time when capital funds for technology entrepreneurs is very difficult to find.

In comments following Apple's purchase of Chalice and Rayz, Observer Jon Roth suggests Apple is positioning itself to take on Avid Technology in the market for digital production tools. Apple's most recent technology purchases compliments the products acquired by Apple in the Nothing Real transaction earlier this year. Today we'll take a quick look at Avid Technology, its balance sheet and market for its products.

Avid Technology

Avid Technology reached an all-time high of $49.25 in October of 1995 and came close to that high with a price of $47.75 in May of 1998. Currently the stock trades at about $8.00 per share with a 52-week high of $16.44. The company's market cap stands at about $210 million and revenues for the most recent quarter were reported to be about $92 million. Avid specializes in products for digital media production and although it does not have exposure in the consumer and traditional IT markets, its revenues and earnings have suffered at the hands of the overall slowdown in technology spending. As of March 31, 2002, Avid had roughly $53.5 in cash and equivalents. Avid is currently struggling to regain profitability, but has an extensive line of products suited to the needs of production professionals.

Adobe Systems

On Thursday Adobe Systems announced a revenue warning, indicating that revenues for the fiscal year would fall between $1.20 billion and $1.25 billion rather than the $1.3 billion previously estimated. In Friday trading Adobe shares dropped significantly in price as analysts downgraded their estimates for Adobe's revenues and earnings in the wake of the warning. Adobe shares finished off almost $5.00 in heavy trading, ending the week at $31.71. In Monday trading Adobe continued to drop in price as more investors moved out of the stock. Adobe ended Monday trading below $30.00 per share at $29.71, a loss of an additional $1.64 in Monday activity. Macromedia also shed value on Friday but recovered some of the loss in Monday trading.

Adobe's revenue warning was prompted by a lack of sales of graphics design software other than Photoshop. The newest version of Photoshop is selling well, but buyers are not choosing to purchase additional Adobe products. There was no information in Adobe's warning concerning sales of Mac OS X versions of its products.

The Mac Observer Stock Quotes and Additional Market Information

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