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If Apple drops below $500 per share, it could be a screaming buy

Apple Introduces iPhone 5

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Apple introduces the iPhone 5 earlier this year in San Francisco. Will it sell enough this year to satisfy Wall Street?

There's a bunch of Wall Street trader stuff happening with Apple right now, as the company heads for the critical conclusion to the holiday shopping season. Analysts who follow the stock have been downgrading their price targets and trimming expectations for the company, which has been on an epic tear for the past two years, but which has also seen its share price collapse in recent months, from a high of more than $700.

This could yield some short-term volatility for AAPL. (That's the company's stock market ID.)

This morning, the stock fell below $500 in trading before the markets opened, before recovering to close at $520

Will it plunge again?

If it does, you might want to take Slate tech writer Farhad Manjoo's sage advice and buy a share of Apple, rather that wasting the money on an iPad. 

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What's going on with Apple's stock?

A participant (L) wearing a mask of Appl

ANTONY DICKSON/AFP/Getty Images

A participant wearing a mask of Apple CEO Steve Jobs and holding a model of an Ipad takes part in a protest against Taiwanese technology giant Foxconn, which manufactures Apple products in China, outside an Apple retail outlet in Hong Kong on May 7, 2011.

Investors are justified in being confused about why Apple has seen its shares completely hammered off their highs of $644 this week, at one point plunging as low as $575. It's all they've been talking about on CNBC. 

There isn't really a good single explanation. So here are three:

• Apple is being sued by the Department of Justice and could be facing a revolt among wireless carriers. I've blogged about the former. On the latter, the likes of Verizon and AT&T currently cover much of the cost of iPhones in their wireless plans. This has enabled Apple to extract their profits, narrowing the providers' margins, while bolstering Apple's 30-percent margins, the thing that undergirds the stock price. If that comes to an end, then Apple won't be able to support a possible $1-trillion market cap on a more reasonable profit-margin model.

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