Apple stock sinks below $500 after Citigroup downgrade

With good news comes bad news. Apple announced that it sold 2 million iPhone 5s in its debut in China, but the company’s stock fell below $500 for the first time since February this morning following a downgrade to neutral by Citigroup.

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Apple stock fell to $499 at 6:55 a.m. Eastern this morning, reports Bloomberg. At the time of this post, the stock was back up to $503.39.

In a note last night, Citigroup analyst Glen Yeung pointed to reduced supply-chain orders that “bring into question the strength of the iPhone 5.” He proceeded to cut his price target on Apple’s stock to $575 from $675.

The Citigroup downgrade comes on top of analyst warnings from Friday that also point to component shortages (which also led to a significant Apple stock drop). Apple’s stock is down from a high of $702.19 on September 19.

Apple’s stock skyrocketed in value on top of the success of the iPhone and iPad, but analysts now fear that sales of those devices will slow due to supply chain constraints, the lack of new innovations, and stronger competition from the likes of Google and Microsoft. Some of those fears may be completely off-base, but their mere existence will lead to Apple’s stock settling well below its former high.

AAPL data by YCharts

Photo: Sean Ludwig/VentureBeat