Apple sees $40bn temporarily wiped from its market value

Apple stocks should be trading at much higher prices given the company's astounding growth and huge cash hoard — Reuters

Apple shares plunged by the largest amount in three months shortly after the start of US trading on Monday 2 December, but traders are still confused as to why the stock price took a turn for the worse.

According to Thomson Reuters data, the Apple stock experienced the heaviest minute of trading since 29 October at around 0951 EST (1451 GMT), as more than 6.7 million shares were traded in a one minute stretch.

Apple's share price fell by over 3% in that frantic minute of trading and then by nearly 6.5% to $111.27.

At the day's low, the tech company lost more than $40bn (£25.4bn, €32.1bn) in market value. However, the Apple share price ended up recovering to $115.04 by market close.

While there has not been any definitive reason for the stock price drop, some analysts have speculated on high frequency trading (HFT) activities being to blame.

"When you see that kind of price action that is simply algorithmic running stocks," said Steve Hammer, a trading educator and founder of HFT Alert to Reuters.

But some say that it is too early to tell.

"The fact is we don't yet know what caused the drop, and blaming it on HFT is misleading," said Bill Harts, chief executive officer of Modern Markets Initiative, to Reuters.