Apple stock plunges again

• Apple shares fall to their lowest level since February as investors question company's perfection
• Possible changes to capital gains tax rates prompt investors to sell many of their winners
• Shares of Apple now down more than 25% from their recent high, outpacing the market's decline

Apple stock fell to its lowest level since February as investors continued dumping shares of the company, no longer perceived as being infallible or worthy of being priced for perfection.

Shares of the maker of electronic gadgets fell $11.26, or 2.1%, to $525.62 Thursday as part of a selloff since hitting a closing high of $702.10 on Sept. 19. That marks a 25% decline in the value of the stock from its high, placing it well beyond the 20% decline that characterizes a bear.

Apple stock, rather than leading the market higher or being immune to its troubles, is a major ankle weight this time. Since the day Apple's stock peaked, the broad Standard & Poor's 500 index is down a much more subdued 7.4%.

"Investors had believed Apple would take over the world, management was flawless, its products were in infinite demand and competition couldn't make a dent," says Jeffrey Gundlach, portfolio manager at DoubleLine Capital, which is betting against the stock. "People overbelieved in Apple."

Analysts say the stock is coming under intense pressure now because of:

• Worry about changes coming with investment taxation. There's a real risk that the tax rates on capital gains could rise next year for many investors, so many are opting to sell winners now and lock in current tax rates, says Jim Kelleher, analyst at Argus Research. Apple's stock is still up 30% this year.

• Realization that losing its visionary founder isn't something to be ignored. Following the death of founder Steve Jobs, Apple lost the taste-master behind its products, Gundlach says, adding the stock could fall to $425 if it follows the pattern of other fallen highfliers.

Since Jobs' death, the company has made a series of foibles, including a poorly received change in mapping software, and has suffered turnaround in the management ranks, he says. It's also following competitors with slightly changed products, such as the iPad Mini, he says.

• Profit compression. The company's enviable profit margins are likely to decline as its costs rise and it faces more competition, says Sameet Kanade of Northern Securities. Consumers are also hitting "Apple fatigue" as they've already bought numerous products from the company with increasingly similar functionality, he says.

• A softening macroeconomy. Consumers are increasingly finding themselves with less discretionary income left for gadgets, including the ones from Apple, says Trip Cowdhry of Global Equities Research. And there's an increasing view the quality of Apple's products aren't premium enough to deserve the premium pricing, he says.

Some investors and analysts, though, think the selling is just temporary. "We see this as a buying opportunity," says Brian Colello of Morningstar.