The first round of a big fight between Apple, Inc. (AAPL) and Epic Games has come to a close.
And Epic Games is the clear winner.
If you haven’t been following along, Epic Games has been embroiled in a lawsuit with Apple over some of Apple’s App Store practices. The big issue at hand is Apple only allowing users to make purchases through the App Store, preventing companies that develop apps from offering direct, in-game purchases from the developers.
Last week, a federal judge ordered an injunction against Apple’s App Store policies, allowing developers to give users a way to make in-game content purchases through a third party.
And that could be a huge problem for Apple.
While losing the exclusive rights for purchases through the App Store may not sound like a big deal, what you need to understand is that Apple charges a 30% commission on app purchases.
Total spending in the App Store in 2020 is estimated at around $72.3 billion. That’s a massive revenue stream for Apple that is now being threatened.
Following the court’s decision, APPL shares fell about 3% on Friday as investors reacted to the news.
The timing of such bad news couldn’t have been timed better for Apple, with the impending launch of its newest iPhone just around the corner. The hype surrounding the latest iPhone’s release is doing a lot to buoy AAPL’s stock, which has already begun to make a marginal recovery from Friday’s lows.
Right now, I would be incredibly wary of buying into Apple ahead of this week’s event until we know more about how much of an impact the loss of exclusivity on App Store purchases – which amounted to roughly 7% of Apple’s 2020 revenue – will have on the company’s bottom line.
Trading tip of the week
Time decay is most important in weekly options.
That means if a trader continues to buy out of the money calls they need FAR: Fast, Aggressive, move in the Right direction.
That means that if a trader does not get a move very fast, then a lot of tons a trader will lose on time decay.
So, a trader must always keep an eye to make sure they do not have too many out of the money calls
Earnings report to watch
After making its debut on the market with an August 4, 2021 IPO, Weber Inc. (WEBR) is set to announce its third quarter 2021 results on Wednesday before the opening bell.
One of the world’s leading brands of barbecues and outdoor cooking accessories, the summer months are expected to be the best time of the year for sales figures – especially in a year in which resurgent concerns over COVID=19 are keeping many at home.
WEBR stock is still trading roughly 28% lower than the high it achieved shortly after its IPO, but a strong earnings report could send this stock back towards those heights in a hurry.
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