Pace the usual market dictum of “buy the rumor, sell the news”, the usual way to play Apple stock around the iPhone launch would be to hold the stock until a few days before the launch, and then sell it, perhaps as late as the day before launch.
Looking back to Apple’s iPod launch on October 23, 2001 — which might not be the the best example, given the proximity to 9/11 — Apple stock climbed 6% in the week leading up, and then fell 4.6% on the day the new iPod was unveiled.
Will the same thing happen with iPhone? A naive read says “Yes”, that we’re seeing the run right now. Apple stock is up 21% in the last month, and almost 5% in the last week. So, be selling your Apple stock on June 28th, right?
Sure, sell some — and sell some now, for that matter — but not so fast. The iPhone launch, like few other tech products before it, has become, for better or worse, a cultural phenomenon. There will almost certainly be people who hear about the launch via front page stories in the NY Times, etc., about long lines expected at AT&T/Cingular stores, and so on. In that regard it will be more like Microsoft’s Windows 95, a cross-over product that got buzz far beyond the tech community.
So, how did Microsoft’s stock do on Win 95 launch date? It climbed 1.2%, and a further 5% over the next week. Despite tons of hype about Win 95′s release, the company’s stock found cross-over retail appeal post-launch.
While I won’t argue that Apple stock will do the same, I also think the behavior of Apple stock around iPhone launch could violate more than a few naive rules about how you should trade tech company product launches.