Apple shares continue their rollercoaster after yesterdays biggest one day drop in four years

Apple’s shares fell 6.4% yesterday to finish at $539 wiping $35 billion off its market capitalisation and marking the worst percentage decline since mid-December 2008. Back in September Apple was trading at $705.

The sell off was triggered by numerous factors but rumours are abounding that the stock is being shorted by hedge funds taking advantage of a noticeable change in sentiment over the last few months.

First there was a report from a trade paper in Taiwan that says Apple may be cutting down parts orders for the iPhone 5 for the March quarter. As well as this, there was news that China Mobile has agreed to carry the Nokia Lumia 920T which uses Microsoft’s Windows Phone 8 software ahead of signing a deal with Apple, though it has a deal with China Telecom.

Sentiment was also dampened by a report from IDC forecasting forecasting that Apple’s share of the global tablet market will drop from 56.3% last year to 53.8% at the end of 2012, and Google’s share will increase to 42.7% from 39.8%.

The bond investor, Jeffrey Gundlach,  the CEO and co-founder of investment firm Doubleline Capital expects Apple stock to continue its downward trajectory, saying that the company seems to have lost its ability to innovate and he expects the shares to hit $425.

From outright bullish sentiment a few weeks ago, any semblance of negative news is being used to clobber Apple and with its gigantic market cap, where Apple goes the Nasdaq follows…

Contrarian investor UK