Apple Inc. AAPL shares plunged 2.2% in yesterday’s trading session, following a fire at its recently-acquired facility in Mesa, AZ. Incidentally, it occurred just a week after Apple had announced its plans to renovate the facility to a Global Command Center, powered entirely by green energy.
According to reports, the solar panels of the facility had caught fire but it was put out before it spread to other parts of the building. The cause remains unknown. However, the report stated that there were no casualties.
In Feb 2015, Apple had unveiled its plans to invest $2 billion for revamping the 1.3 million-square-feet facility. Earlier, the production facility was utilized by GT Advanced Technologies which filed for bankruptcy in 2013. Thereafter, it was surmised that the Apple-owned facility could be used as its own manufacturing facility in the U.S. to supplement output from suppliers for making its iPhones, iPads and Mac devices.
Media reports now say that the proposed data center is one of the largest investments made by the tech giant. Apple has plans to hire nearly 300 to 500 workers for this center, which is scheduled to start operations in 2016.
Apple is also likely to benefit from sales tax savings (on electricity or natural gas) of about $1.3 million once the data center becomes operational.
However, in the absence of any official information from the company regarding the impact of the fire, we can only speculate on the extent of damage. The structural damage, especially in the massive solar panels could be a bit of a setback and it isn’t clear whether Apple will still be able to start operations next year.
Apple currently has a Zacks Rank #2 (Buy).
Some other stocks in the technology space that can be considered include Synacor, Inc. SYNC, Gaiam Inc. GAIA and PetMed Express PETS. All three have the same Zacks Rank as Apple.
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