June 24 (Bloomberg) -- Apple Inc. dipped below $400 for the first time since April as a glut of unsold iPhones prompted Jefferies & Co. to lower its target price, and Global Equities Research said low morale is causing employee departures.
Apple, the world’s most valuable technology company, fell 2.7 percent to $402.54 at the close in New York, after earlier dropping as low as $398.05. The shares have declined 24 percent this year, compared with a 10 percent gain in the Standard & Poor’s 500 Index.
The stock has retreated 43 percent from a record high in September amid concern that Chief Executive Officer Tim Cook has taken too long to deliver a new breakthrough product to help make up for stiffer iPhone competition. Retailers and wireless carriers have twice the normal levels of iPhone inventory, indicating that Apple is selling fewer handsets than expected, said Peter Misek, an analyst at Jefferies.
Trip Chowdhry, an analyst at Global Equities, also said morale is low and more Apple workers are seeking jobs at companies such as Google Inc. and Facebook Inc.
Apple is “a whipping boy of Wall Street right now,” Laszlo Birinyi Jr., the founder of Birinyi Associates Inc., said in an interview with Bloomberg Television last week.
In the second half of this year, Apple will build a maximum of 85 million iPhones, Misek wrote in a research report, less than his prior estimate for 110 million units. He rates the shares a hold and cut his target price to $405 from $420.
The stock slump is being felt by employees, Chowdhry said. Google’s shares, by contrast, have gained 23 percent this year.
“Recruiters are seeing more and more employees from Apple applying for jobs at Google, LinkedIn, Facebook and even Hewlett-Packard,” Chowdhry wrote in a research report.
Steve Dowling, a spokesman at Apple, declined to comment.
As of last week, Cook’s pay will be determined partially by Apple’s stock. In a change to his pay package, Apple’s board said on June 21 that about a third of the 1 million shares Cook was awarded when he succeeded Apple co-founder Steve Jobs in 2011 will now be determined by how the stock performs compared with other companies in the Standard & Poor’s 500 Index.
Other than a new MacBook Air laptop, Apple hasn’t had a new product go on sale since last year, leaving investors and customers awaiting the release of a new iPhone and iPad, which may arrive later this year. Apple’s profit fell for the first time in a decade in the most recent quarter, and analysts predict the slump will continue in the current period.
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