The price of Apple stock dropped as low as 26-1/8 before closing the day at 26-13/16, down 2-3/8 from yesterday.
That was the day that Apple cofounder Steve Jobs gave his keynote speech and rolled out two major Apple announcements: Microsoft's $150 million investment in the company and a new slate of board members.
Apple's shares yesterday rose as high as 14 percent to 30 in early trading before closing at 29-3/16, up from its close of 26-5/16 the previous day. Volume yesterday reached a staggering 23.7 million shares.
The share price surge came on the heels of an 8-point jump Wednesday, when Microsoft (MSFT) chief Bill Gates announced at the Macworld trade show in Boston that Microsoft would invest $150 million in the troubled company as well as collaborate on technology development with Apple. Jobs, who is leading the company's search for a new CEO, also announced that Oracle (ORCL) chairman and CEO Larry Ellison, Jerry York, former CFO of Chrysler and IBM, and Bill Campbell, CEO of Intuit, would join Apple's board.
While Apple has been knee-deep in turmoil for the past month since it announced the resignation of CEO Gilbert Amelio, the company's share price has continued to rise.
Apple's stock started the month at rock bottom: 12-3/4, the lowest it has been in over 12 years. But, even as executives continued to depart--executive vice president of technology Ellen Hancock also resigned July 9 with Amelio--the company reported a smaller-than-expected loss. The stock has continued to gain momentum since, closing unchanged Tuesday at 19-3/4, up 55 percent from a month ago.
But the stock's gain is based on anticipation of real change, not smoke and mirrors. Whoever ends up in charge of the ailing computer company needs to have a game plan. "Amelio didn't have a game plan beyond cutting costs. [Apple] needs a different product strategy or distribution strategy," said James Poyner, an analyst with Oppenheimer & Company.
But that new plan might cost Apple its soul as an alternative to the Microsoft-Intel platform.
Ellison, who is heavily promoting the concept of a stripped-down network computer, has his own ideas of what Apple needs to do to survive--concentrate on entry-level products and revamp the company into an NC manufacturer with the Macintosh brand.
According to a story published in The New York Times on Friday, Jobs is pushing Apple to consider making cheaper Macintosh personal computers that draw their power from the Internet. Jobs, who is a close friend of Ellison, is also a big proponent of NCs.
The prospect of Apple making NCs, along with the recent executive shuffle, has caused uncertainty among clone vendors as they question the company's dedication to supporting an openly competitive Mac market. Sources have said that efforts to strike a new licensing agreement for Mac OS 8 are at a standstill.
Jobs's growing influence at the company since Amelio's departure last month has boosted morale among Apple employees and customers, analysts said.
"Steve is a good guy," said Barry Bosak, analyst at investment bank Smith Barney. "Steve returning to Apple is a good thing."
The long-running Apple soap opera escalated early last week when several newspapers reported that Jobs would once again become Apple chairman. Jobs, who founded the company in his early 20s working from his parent's garage, was fired in 1985. He returned to the company as a part-time adviser in December when Apple, under then-chairman Amelio, bought Next Software, the company Jobs founded after Apple.
Reuters contributed to this report.