NEW YORK Nov 7 Apple shares could come under
further selling pressure and drop to $425 a share over the next
year on lack of innovation, said Jeffrey Gundlach, chief
investment officer and chief executive officer of DoubleLine
Gundlach, who recommended betting against Apple in
mid-May at the Ira Sohn Investment Conference in New York, told
CNBC the company's stock is "overbelieved" and that its recent
debut of the iPad mini is not an innovation.
"The product innovator, as I've said over and over again,
isn't there anymore," Gundlach said in reference to Apple's late
founder Steve Jobs.
Shares of Apple, whose latest quarterly results failed to
meet Wall Street's lofty expectations, has fallen more than 20
percent from a record high of $705.07 in September. Shares slid
as much as 4.6 percent on Wednesday to a low of $555.75 before
ending the day down 3.8 percent at $558.0019.
Wednesday, Apple shares were under pressure as investors
grew more uncertain about its ability to fend off unprecedented
competition and untangle a snarled iPhone 5 supply chain.
Gundlach, whose firm oversees more than $45 billion in
assets, said that the stock could fall to around $425 a share.
With regard to the benchmark S&P 500 's 2 percent
decline on Wednesday, Gundlach said that investors may be
anticipating the impact of higher taxes on capital gains that
U.S. President Barack Obama is expected to implement.
"If you're going to think about higher tax rates, maybe you
want to sell the stocks before the tax rates go up, and I think
that may be pressuring stocks in general," Gundlach said.
Gundlach said that the "fiscal cliff" of tax increases and
spending cuts set to begin at the start of next year could be
"punted down the road," but that it could also prove a
"monumental" shock to markets if investors doubt its potential
Gundlach also said that his DoubleLine Total Return Bond
Fund has roughly 15 percent of its assets in cash and
that he expects markets to become more volatile.
"I really am looking for higher volatility in the market as
a general theme," he said.