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.]