Donald Trump recently leveled an attack against Apple Inc. (AAPL), putting holders of Apple stock on notice. Trump is blaming chief executive officer Tim Cook of lollygagging the Federal Bureau of Investigation.
The debate hinges on an iPhone belonging to Syed Farook, one of two known conspirators that was directly involved in the San Bernardino terrorist attack.
A California judge has ordered AAPL to comply with the FBI in helping break into the iPhone in question. However, AAPL’s Cook has stood firm, writing a public letter explaining the Pandora’s Box of security protocols that would have to be breached.
If AAPL won’t back down from the glare of the FBI, it certainly won’t concede an inch to Donald Trump. Despite the billionaire’s call for a boycott of AAPL products — one in which he threatened to only use Samsung Electronic (SSNLF) devices until the technology giant relents — investors of Apple stock remain unperturbed. They’re owners of one of the biggest companies in the world, with a vast array of riches. How much damage can one reality television star do?
Plenty, if you’re Donald Trump. No matter how many times the media from both sides of the ideological spectrum attempt to lampoon and discredit him, Trump has become a separate entity — so much so that the normal laws of political physics no longer apply. Even getting into a spat with the Pope has had no appreciable impact on the Trump campaign.
What this means for Apple stock is that the controversial businessman carries substantial leverage — and a growing number of Americans agree with him.
Apple Stock Could Suffer From Trump’s Position
It’s not just the fact that Donald Trump is steamrolling the competition in the bid for the Republican nomination. He is doing so in the face of overwhelming opposition by the establishment of the very party in which he is running.
What undermined the Bush campaign was that, no matter how hard he tried, Bush was viewed in the context of Trump — and he looked comparatively weak. And whether Apple stock investors realize it or not, The Donald is playing the same game with AAPL. The results are certainly not encouraging for the company.
According to a just released survey conducted by the Pew Research Center, 51% of respondents sided with the FBI with regards to the terrorist’s iPhone, whereas only 38% favored AAPL’s position. The remaining 11% had no opinion. Technically, this indicates that a majority — though slight — also sided with Trump’s rhetoric in the matter. But much more importantly, 75% of the respondents stated that they had heard about the legal gridlock between the FBI and AAPL.
Because the Pew survey was conducted between Feb. 18 through Feb. 21, Trump’s bold intrusion into the discourse on Friday, February 19, undoubtedly boosted national awareness. The real estate mogul dominated the social media sphere in 2015, often peppering the internet with candid, off-the-cuff remarks. And the more controversial the comments, the more he generated engagements among his millions of followers.
It is this ability to corral public opinion that holders of Apple stock should fear the most. AAPL stock is trading in a fairly tight consolidation range for the month, but that could change in a heartbeat. If faced with another tragedy, many will recall AAPL’s reluctance in cooperating with law enforcement. What could have been lost in the granularities of daily corporate administration is now a popular feed on Twitter Inc. (TWTR) and Facebook Inc. (FB).
Ultimately, Apple stock investors can’t necessarily afford to ignore Donald Trump without consequence. While AAPL stock hasn’t responded much to the current controversy, Trump is attacking the tech juggernaut at a particularly sensitive time. AAPL stock is down 10% year-to-date, with the company struggling to gain traction. The Donald‘s jabs may not upend Apple, but it’s an unwanted distraction. In the worst case scenario, it could also be an open-ended liability.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.
