Elmer-DeWitt reports, “This one was a classic slingshot, described succinctly by Jason Schwarz in his seminal Apple: Seven Reasons Shorts Love It: ‘If you can keep a good stock down,’ he wrote, ‘then you are able to load up for the ride back up. It’s like a slingshot — the harder you pull, the more propulsion you generate.’
MacDailyNews Take: “[Hedge funds and other investors] target strong companies like Apple with lies and rumors. In fact, it works better with a strong company like Apple, because after being artificially sunk, it then bobs right back up and the shorts can have their way with it all over again.” – MacDailyNews Take, April 8, 2009
Elmer-DeWitt continues, “This slingshot was timed to bring Apple’s shares down in advance of the company’s first quarter earnings report on Monday. The action started at 9:12 a.m. Friday when theflyonthewall.com reported, without explanation, that Deutsche Bank had removed Apple from its short-term buy list — a report that was immediately picked up by the talking heads at CNBC, who mischaracterized it as a ‘downgrade'”
“What actually happened, as the folks at Deutsche surely knew but didn’t bother to report, was that Apple’s six months on their short-term list had expired that morning, triggering a computer instruction that removed it from the buy list automatically,” Elmer-DeWitt reports. “No matter. The boys were looking for a reason to take a whack at Apple, and this news fit the bill. They set the wheels in motion, and by the close of trading the stock had fallen 10.32 points (3.55%), shaving $9.3 billion off the company’s market cap.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “James W.” for the heads up.]
I have to say, no one should really comain about manipulation of AAPL. If you are a long term investor, short-term artificial manipulation by analysts and hedge fund managers have very little effect over the long-term and if you are a short-term trader, they offer you a position to get in cheaply. Traders can’t make money if the price doesn’t fluxuate.
It should still be against the law! Especially false stories that hurt the companies value.
@ freefromdesign
I believe this type of manipulation has gone out of control. It creates too much instability just so that some traders can make money by artificially moving the stock.
Same thing happened with the credit market and look what mess we are in now.
I am long term already with a bunch of Apple that is several years old. I had been planning to buy some more on Friday due to a feeling about the new product and the earnings report. When I called my broker he said the stock was down about 8. It went down another 2 while we were talking, so I had him place the order. I was worried there was a health story about Steve Jobs, that I had missed. I don’t even think that will slow down Apple in the long run but it would definitely bring the stock down. Anyway, I was glad to buy in trough, since the stock is at a high range now. I definitely am amused at the way the stock is manipulated by sleazy reporters and hedge funds. I think a day trader could make a living on just Apple.
In a sinking tide, all the boats go down. The entire market plunged after the Scott Brown election, as investors fear the gridlock to come from The Party Of No. Why is this an Apple story?
I told you so.
It’s not done yet either. Right after Apples event, expect the stock to tank in a massive sell off by hedge funds. Apple doesn’t share dividends with share holders, so stock price is the only way you can make money on the stock. Hedge funds are itching for a sell off.
Moral of the story: don’t marry a Stock. Even AAPL. Selling is half of the game.
Wall Street is very much disconnected from Main Street and there are still way too many people who believe instant gratification takes too long. These people, after all, are the ones that don’t recommend Apple when they report great quarters because they feel Apple has peaked. They are clueless. What they are overlooking is that the tablet will do for media what iTunes did for music. If I were Steve I would keep these vultures at bay they just don’t get it
Should drop more. More the merrier.
http://www.bing.com When it comes to decisions that matter, Bing & Decide
What do they mean by Deutsche? Deutsche Post? Deutsche Markenbutter? Oh! Deutsche Bank. Why didn’t Philip Elmer- say so? It would have made much more sense here in MacDaily.
The people on Wall St. will destroy anything to make one penny. Take jobs in this country and send them to some place where they pay 50 cents a week. Absolute 100 percent scumbags. Total and complete wastes of human organs.
I think the Scott Brown election – in normally liberal Massachussetts – is a sign that people are beginning to understand business is not evil, employers are not evil, and trashing everything in the private sector is not a very smart to increase employment. Hopefully the Cap and Trade idea is dead, which is the idea of punishing businesses that produce products. And then there is Tax Increase coming next year – letting the Bush tax cuts expire. Now Democrats are beginning to whisper that maybe increasing taxes when real unemployment is around 20% is maybe not a great idea.
So – thank you Scott Brown.
WTF? Take your head out of your …
Obviously the digit IQs are out and about.
This is a question not worth asking. Google dropped 32 points on Friday. The whole market was down, as it will always be whenever anything threatens to remove even a penny from the pockets of the greedy money monsters on Wall Street. Why is there air?
The Bush tax cuts were for billionaires only. Letting Bush’s gift to crooked cronies lapse is NOT raising taxes.
@neomonkey
As opposed the the Party of Your Wallet is Mine that wants to give the leeches of society everything you worked hard for. NO to that every day!
The Bush taxcuts were pretty exclusive -they only applied to working people who pay taxes. So a lot of Democrats don’t get them. Like for example Tim Geitner and Charlie Rangel. They don’t make enough to pay taxes.
Mr. Right you are wrong. The tax money goes directly to the rich, not the welfare queens. Republicans don’t understand what they are doing to themselves..
@Kent
Do you really believe what you’ve just said? How much do your tax bill go down under Bush?
@Hm
I don’t want censorship – unless it is foul stuff. MDN may be keeping up the neighborhood. But debate is good. I notice a lot of the liberal comments are not discussion, but strange name calling with no substance.
Investors are focusing their concerns on the Washington political controversy and concerns over weaker economic recovery. The broad-based, indiscriminate sell off also caused a retreat in AAPL.
We live in financially dangerous times. Politicians neither have the experience nor the remedy for a historical recession; and, there are also foreign (e.g. China) investment dynamics that may further alter market performance and investor behavior.
@ Original Shiva
I assume you know how to Google. Find what the Bush tax cuts were. They included rate table cuts to all the rates. That is sometimes referred to as an across the board rate cut. That would apply to everybody. You should not make political comments if you are too lazy to actually understand anything more complicated than “it’s all Bush’s fault”
“Why did Apple’s stock price drop 10.32 points on Friday?”
You ARE kidding… right? Gee you really DON’T know much about the market.
It’s called a COLLAPSE. Duh. The market’s going back down below where it was in March, as some of the world’s greatest investors (such as Paul Tudor Jones) have said quite plainly.
The entire market dropped 5% on Friday when Obama was talking about bank regulation.
“The entire market dropped 5% on Friday when Obama was talking about bank regulation.”
If someone had regulated the banks before, then maybe we wouldn’t be in the mess we are in now. Some of you fools are crazy sick with the notion that capitalism somehow can work in a vacuum of rules. It can’t. There have to be rules in place to prevent the kinds of things that happened at the end of 2008.
But don’t let the details of the story fool you. I mean they explained it very clearly in the article. Just go on and keep blaming Obama for every little thing.