What caused Tuesday’s sharp drop in Apple’s stock price?

48 Comments

“Apple Inc.’s big weighting within the Nasdaq is starting to turn heads, especially after a sharp dive in the company’s share price on Tuesday morning created something that looked like a mini flash-crash,” David Berman writes for Seeking Alpha. “Apple, of course, has been growing in size as a technology company, with a massive market capitalization that gives it a 20% weighting within the Nasdaq 100 – a popular benchmark for exchange traded funds.”

Berman writes, “Apple shares plunged 5.5% at the start of trading – and when we say plunge, we mean a straight line down – and dragged down a number of other shares with it, along with the Nasdaq. The scene was reminiscent – if far more tame – of the dramatic dive in stocks in early May, when the Dow Jones industrial average fell about 700 points nearly instantly, before recovering.”

AAPL chart for Tuesday, September 28, 2010:

Read more in the full article here.

MacDailyNews Take: Apple’s massive size may have the additional benefit of making it too visible a target to be safely manipulated. Everyone’s watching now, criminals.

Related articles:
What caused Tuesday’s sharp drop in Apple’s stock price? – September 29, 2010
Did Apple stock today suffer its own personal mini flash crash? – September 28, 2010
Apple stock opens ugly – September 28, 2010

48 Comments

  1. “Get people talking about it as if something is wrong with RIM,” Cramer advises. “Then you would call the (Wall Street) Journal and talk the bozo reporter on Research in Motion and you would feed that Palm has got a killer it is going to give. These are the things that you must do on a day like today. And if you are not doing it, maybe you shouldn’t be in the game.”

    How do you drive Apple stock down to profit from your short position–especially when the company is just about to announce it’s new IPhone?

    “Apple–it is very important to spread the rumor that both Verizon and ATT have decided they don’t like the phone,” Cramer says. “It’s a very easy one to do. You also want to spread the rumor that it’s not going to be ready for MacWorld. And this is very easy, because the people who write about Apple want that story. And you can claim that it is credible because you spoke to someone at Apple. It is an ideal short. If I were short Apple, I would be working very hard today to get that. And the way you would do that is pick up the phone and call six trading desks. And say, listen, I just got off the phone with my contact at Verizon. And he has already said–we’re a Samsung house, we are a Motorola house. There is no room for Apple. They want too much. We are not going to let them in. We are not going to let them do what they did to music. And that’s a very effective way to keep a stock down.”

    http://tinyurl.com/3dmuu4

    Reply

  4. When is the SEC, or Congress, going to recognize that computerized trades at fractions of a second are not needed to create liquidity, but instead create unsafe volatility? Short term trading does nothing to add any value to any company or it’s products by providing needed capital. The only benefit I have heard of is providing liquidity – but who really beleaves that liquidity in fractions of a second is necessary?

    Reply

  5. When is the SEC, or Congress, going to recognize that computerized trades at fractions of a second are not needed to create liquidity, but instead create unsafe volatility? Short term trading does nothing to add any value to any company or it’s products by providing needed capital. The only benefit I have heard of is providing liquidity – but who really beleaves that liquidity in fractions of a second is necessary?

    Reply

  14. All Apple needs to do is set aside 1 or 2 BILLION to BUY at 5% trailing the stock and another BILLION 5% under that. No one will try to Flash Apple’s stock. Apple can make their own floor! Try it somewhere else idiots. Apple would pick up a half billion on the next attack!

    Reply

  15. All Apple needs to do is set aside 1 or 2 BILLION to BUY at 5% trailing the stock and another BILLION 5% under that. No one will try to Flash Apple’s stock. Apple can make their own floor! Try it somewhere else idiots. Apple would pick up a half billion on the next attack!

    Reply

  16. Anyone who is investing in the stock market these days is an idiot. The only one making steady profits in the market are the big banks. “Retail” investors like you and I are just cannon fodder.

    ——RM

    Reply

  17. Anyone who is investing in the stock market these days is an idiot. The only one making steady profits in the market are the big banks. “Retail” investors like you and I are just cannon fodder.

    ——RM

    Reply

  18. I saw the dip first thing in the morning when I checked MDN. The thought occurred to me that the stock price might decline throughout the day–I have seen this happen before. On a whim, I placed an order about $3 below current price. When I checked after lunch, the second dip had happened and my order was filled at $285. Not an investment strategy. Just a whim.

    Reply

  19. I saw the dip first thing in the morning when I checked MDN. The thought occurred to me that the stock price might decline throughout the day–I have seen this happen before. On a whim, I placed an order about $3 below current price. When I checked after lunch, the second dip had happened and my order was filled at $285. Not an investment strategy. Just a whim.

    Reply

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