“Maybe it’ll be a semiprofessional hedge fund in Connecticut. A money manager in La Jolla, Calif., or West Palm Beach, Fla. A couple of former college roomies in Silicon Valley or Seattle,” Arends writes. “The scam is easy; some will fall for it.”
“Here’s how it’s going to go down: First, scammers will go into the derivatives market and buy a bunch of put options on Apple shares. Puts are effectively a bet that a stock will drop quickly. Then they’ll send out word that Steve Jobs is terminally ill with cancer and isn’t expected to return to work,” Arends writes. “Simple. Easy. Free money.”
“The stock will plummet. Nervous investors will bail in panic. The put options will balloon in value. (Look at what happened earlier this week: Apple stock initially dropped more than $20 on news of Jobs’s new health problems.) The scam artists will cash out, and walk away,” Arends writes. “What makes this possible is Apple’s refusal to say anything whatsoever about Jobs’s illness or his absence… Nature abhors a vacuum. And if Apple won’t offer details, that leaves the door wide open for others.”
Read more in the full article here.
MacDailyNews Take: With history as our guide, we can’t disagree with Arends on this one.
This guy is the “scam artist.” The last time Steve Jobs went on a leave of absence, Apple’s respect for his privacy and confidentiality saved AAPL investors over the period of his leave.
That last time, the stock did go down initially, but recovered as Apple (led by Tim Cook) demonstrated it could operate and deliver without Steve Jobs being present continuously. By the time news came out about this liver surgery, investors were focused on Apple, not Steve Jobs. The release of iPhone 3GS was in the news and Steve Jobs was already in recovery from the operation for several months. Damage to AAPL stock price was minimal, because the news was actually GOOD news.
Now, imagine if Apple had felt compelled to provide daily updates on Steve Jobs. The media would have been doing “play-by-play” commentary on the operation, with “expert analysis” on the side. They would have covered his recovery period, causing harmful distraction to the patient. AAPL would have taken a severe hit.
Apple is handling information properly. The media folks are upset because they don’t have a story. Screw them…
Thank you ChrissyOne, you took the words out of my mouth – “Thanks Brett!!! You slime-spewing bile-seething shit monkey! “
Brett Arrends is worse than Scott Moritz, Enderle and Thurrott put together…
Shame on MDN for giving him hits.
@bobo
“Investors” – individual, employee/management, and institutional – comprise the market cap of all corporations. If you are referring to individual investors, then the numbers vary. In the case of AAPL, the last time that I checked less than 1/3 of Apple’s market cap is held by individual investors. A significant majority – somewhere around 70% – is held by institutional investors such as retirement funds, mutual funds, etc. Of course, those institutional investments largely lead back to us little guys, but we don’t control the daily trading in those stocks or the voting rights associated with them.
Shite article
In about 2 weeks apple will speak… Not with news about jobs but with new products… The slow and steady march of updates and new stuff will lead up WWDC in June. Steve will be back on stage… Apple has a new product to be released in 2011. Plus all the updates…. Little updates, big updates
-Verizon iPhone
-iWork
-Mac book
-final cut studio
-iPad 2
-new product (top secret)
-iPhone 5
All leading up to WWDC… Then in the fall 2011 Apple will revisit music, movies, via
– iPods
– Apple TV
And be primed the biggest Christmas Holiday quarter ever… By 2012 AAPL will be up 50% at over 500/share.
Steve will not step down as CEO until 2012. Cook will take the helm. The plan is set. If the stock price drops then pick up what you can….
Apple will speak with actions not words..
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MDN you published a hit piece. This is jibber jaber at its best. Do not promote this garbage.
I’d like to agree with some of you, but Steve Jobs has a right to privacy, personally and legally.
It’s easy, forbid put options, period.
And anyone, today, who makes any kind of buy/sell decision on that kind of rumor deserves to lose their shirts.
It’s called natural selection.