This Macworld Keynote cost Apple’s stock $9 in share price. It just goes to show how strongly perception plays into market valuation. Lets take a look at history for a few of the more famous examples.


Tulip Mania

Tulip Mania

In the 16th century, the Ottoman Empire experienced rampant price competition over Tulip Bulbs. Nobles and their ilk were chomping at the bit to get their hands on the rarest specimens. The result? A huge run up in price, followed by out of control speculation and ended by a massive drop in price as fashion shifted to more interesting horizons.


Mississippi Company

John Law

In 1717 John Law proved that marketing can sell anything. After acquiring a derelict trading company and significantly overstating the wealth of Louisiana, John was able to drive up the share price in his company from 500 livres to 15,000 by 1719.

About a year later, the Mississippi Company used its outrageous valuation to buy up all of the French government’s debt. This would not have been an utterly crazy move had the companies share price not bottomed out in 1721. It just goes to show, even the best Marketing won’t make a bad product good.


South Sea Bubble

South Sea Bubble

The South Sea Bubble is the story of Lord Treasurer, Robert Harley, government sanctioned trade monopolies and the dangers of debt to equity transactions. At its best, the South Sea Company was a made to order method for the British government to transform high-interest debt into low-interest, easily convertible stock.

At its worst, the South Sea Company was a monopoly that could not hold its head above water. After reaching a high price of £1,000 in 1720, shares in the South Sea Company quickly nose dived to £150. The company was later restructured and laws were passed to try to prevent this sort of speculation from happening again. They weren’t quite successful.


Web 2.0 Roundup

Sure, it’s really unlikely that a little thing like a Keynote will have any long term effect on Apple’s stock price, but it’s worth remembering just how important perception can be even for a company like Apple.

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