Shutterfly Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of online photo expert Shutterfly (NAS: SFLY) were in a tailspin today, falling as much as 17% in intraday trading after Apple (NAS: AAPL) revealed that it's getting into the company's business.

So what: It wasn't much of an announcement, but during its presentation of the new iPhone, Apple revealed a new app that will let users design greeting cards on the iPhone or iPad and then have them printed and mailed by Apple to addresses all over the world. With Apple seemingly unstoppable right now, if there's one thing you don't want, it's the "king of i" becoming a direct competitor.

Now what: Obviously Shutterfly doesn't shrivel up and die simply because of this app, but this definitely gives Shutterfly shareholders something to think about. Growth expectations are high for the company and investors are currently paying a price that bets heavily on that growth coming to pass. In the coming quarters we'll see in black and white whether Apple actually makes a meaningful dent in Shutterfly's business, but from where we stand today, I'd definitely be wary.

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At the time this article was published The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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