Why did Apple pop yesterday? $15.4 billion one-day gain exceeded market value of half the companies in S&P 500

“The $16.49 Apple (AAPL) rose Thursday was only its sixth largest one-day dollar gain, according to AAPLInvestors, and in percentage terms, 3.46% doesn’t even make the top 10,” Philip Elmer-DeWitt reports for Fortune.

“But when the world’s most valuable company rallies a few points, its market capitalization gets a whole lot bigger,” P.E.D. reports. “According to the Bespoke Investment Group, Apple’s one-day gain Thursday — $15.4 billion — was larger than the market cap of half the companies in the S&P 500.”

P.E.D. asks, “Why Thursday?”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

37 Comments

  1. How sweet the news is. Man I love Apple not only amazing products but owning a boatload of their stock is making me some big money. Glad I got in and in very early. What other stock would you buy over the past two years that would have performed like this. This is nothing more than a needed fix. The market adjusted for those many months of doldrums that Apple was in even when they kicked butt the stock would barely move. Part of it is their numbers for sure and partly because their competitors are just outclassed. Their TV commercials are pathetic and people are waking up to the fact that if you want a virus ridden phone you get a 2 for 1 hemorrhoid phone with 30 minute battery life.
    Lets not get me started on all the cash Apple is hanging onto and generating. Get ready for Itv from Apple. You guys in TV Land are next to have your industry shaken up for the better.

    Apple Wins: Music Industry Owned, Movies on Demand Owned, Ebooks Owned, TV Industry about to be owned.
    The best phones, the best OS’s, the best customer satisfaction,…
    For the rest of you innovate or Die. Apple might be coming to your industry.
    Hows this for fun thoughts
    Apple Automotive, Apple AeroSpace, Apple Worldwide High speed Wireless Internet provider. Apple Wireless TV Provider
    Apple Tabasco? AppleMart?

    I will shut up but Im all giddy over the stock sorry!

    1. Andriod = hemorrhoid
      I like it. I like it a lot.

      Had most of my stock since the week after the first bondi blue iMac was introduced. I knew the minute Steve was back and dictating product lines that things were going to start rolling again, but I never envisioned nearing $500 a share. Ka-ching!

  2. Apple has shaken up every industry and market it enters. If they enter TV, it will be one of the largest earthquakes to hit electronics. I hope they do, but they will have to find a way around conventional broadband. Their competition (cable and DSL/phone companies) can easily cause Apple’s service to “accidentally” degrade compared to their own.

    Now, if Apple can establish their own cellular broadband (a huge, currently ignored, rural market), no foot-draggin’ telecom company will be safe.

    Apple has tons of room to expand; bringing us back to the 21st century technology that the colluding major corporations have denied us.

    1. It’s amazing when you think about it. Apple has the financing to enter absolutely massive markets that nobody else really can and make an impact. The market cap for AT&T is over 100B – imagine the growth opportunity if Apple entered this space, and that’s just the USA. Margins may take a hit but that is inevitable if they venture into other business lines. I see massive growth in revenue and profit ahead, and not just from selling devices.

      I’d also love to see an ad-free Apple search engine, optimized for use with Siri. It wouldn’t make any money but it would strengthen the ecosystem, not to mention the impact it will have on Google.

  3. does anyone know:

    1. If a dividend is declared, will Apple backdate the point of share ownership or keep it that day (ie what is usual for such dividend payouts)

    2. If Apple decides to give some of its cash back to shareholders, then won’t this result in an immediate, (but likely temporary) drop in AAPL share value – in presuming the cash is otherwise taken into account in said share value?

    Thanks for any insights on such things

    1. 1. Last time they did not backdate.

      2. If it’s a one-time dividend, maybe the price will drop. If it’s a regular dividend then all those “income” funds that are now prohibited by their own rules from buying AAPL will want a piece of the action and they will buy, pushing the price even higher.

  4. I love Apple products, but I’ve been managing money for 41 years. Don’t get so starry eyed on the stock that you don’t see a classic “blow off” in the making. The company and the stock are two totally different beasts and long term in this business is overnight. The tech bubble in 2000 was no different than what you may be witnessing now.

    1. The companies driving the 2000 tech bubble were companies that could boast huge market share but zero profits. Most of them lost money on every new customer. It was all betting on the come.

      Apple doesn’t care about market share. They’ve refused to participate with Dell and others in a race to the bottom by offering junk at bargain basement prices. Apple typically has a 10% to 30% market share and rakes in the majority of the profits in every sector in which it participates. I’ve made a lot of money on AAPL by betting against the recommendation of people who’ve been managing money for a long time. They just don’t understand that this is a different ball game with different rules.

    2. It’s money managers like you who told me I was crazy to invest in Apple back when Steve returned and it was around $13. Brokers tried desperately to talk me out of selling off FexEx and some other holdings I had and putting it all in Apple. (Wish I’d put more.)

      After that I decided if you money managing guys knows so much, how come you aren’t all super rich investing your own cash? Hope that old Money Manager remembers me every time Apple hits a new record.

    3. Robbll . . . I’ve been investing in AAPL since 1988, when my software company finally began making a profit and I had some cash to spare. Since that time, I have amassed 5700 shares of that equity, average price per share, $12.41.

      Over these 24 (or so) years, can you guess how many analysts, brokers, money managers, financial counsellors, Wall Street Wizards, friends, relatives, colleagues, employees, computer gurus, and the like have advised me to buy AAPL? Can you?

      None. N-O-N-E. Not One. Zero. Zilch. Nada. Bupkis.

      I bought AAPL out of personal love for the company, its leaders, its products, its focus, its devotion to excellence, and its willingness to lead when all other merely followed. Please, please pardon my brashness here, but following your advice in this matter–and that of people just like you–would have denied me a couple of million dollars I present hold and have earned the hard way.

      You’re welcome to keep doubting, Robbll, but do NOT expect everyone here to heed your advice.

      1. “can you guess how many analysts, brokers, money managers, financial counsellors, Wall Street Wizards, friends, relatives, colleagues, employees, computer gurus, and the like have advised me to buy AAPL? Can you? None. N-O-N-E. Not One. ”

        Because you are not a sheep and know you have the knowledge to make your own decisions, which separates you from 80% of the population.

        Be proud and prosper! And DO NOT feel guilty, as the politically correct will beg you to do.

      1. Come on, Rob, sorry to sound like a jerk, but that’s a pretty pathetic reply. If you’re in it for the long haul with AAPL, Mr 41 years of experience, pay attention to the company. We consistently see that it’s massively undervalued. My wife and I have owned quite a bit of it since 2005, and I have consistently ignored the professionals who are like sheep in their insistence that we diversify. If you don’t really understand their products and the much larger picture of their ecosystem, they you’ll sit around worrying that any old company can come along and give them a serious run for their money. In Jan 2005, after watching the MacWorld keynote, it became so overwhelmingly obvious that Apple had the vastly superior OS, superior audio and video production products and expertise, superior hardware expertise, a hugely passionate employee base, and a vision to tie it all together. There was NO ONE in 2005 who was going to touch them. Only a few of us at the time seemed to get that, which I find weird since I don’t consider myself a genius in the least. After watching that keynote, I walked upstairs and announced to my wife that I would be selling my MSFT shares (which I accrued while working at Microsoft) immediately, and recommended that she put every bit of cash that she had into AAPL. I literally pushed her out the door to go the bank the very next morning.

        I watch the ups and downs. When it goes down, I just shake my head because it is nothing but sheep shenanigans. And when it rockets up, it feels late to the party every time. Pay attention to the company. It continues to be vastly superior to any other company on this big planet of ours. Have you read the excerpts about the inner workings of the company these past 2 months? It’s jaw-dropping, and you can bet that every other company is getting their photocopiers out. AAPL has weathered the economy. Right now, it is recession proof. If the sheep want to act stupid during this recession, let them. If you’re long on AAPL, just shake your head and wait.

    4. Weren’t the tech bubble stocks trading at ridiculously high valuations? Qualcomm 800x earnings, Lucent no earnings ect…. Apple is trading at 9x forward earnings.I really don’t see how that could be a bubble.

  5. One last thing…

    Back in 2000, the Wall Street Journal had many an article on how much money people were making in the market. By the time they started selling there were no profits left.

  6. Enjoy it while you can. Because no amount of Keynesian pump-priming is going to help this economy. Japan is only now recovering from a 21 year protracted recession. The U.S. on the other hand is just getting positioned to start theirs. And contrary to many think, no amount of misguided government policy driven by political pressure to achieve the impossible is going to help.

    1. Mark; “Enjoy it while you can. Because no amount of Keynesian pump-priming is going to help this economy.”

      Yes, unfortunately true. The unlimited printing of money that we are doing now, which dilutes that value of every succeeding dollar out there, is precisely like taking your car with a half full fuel tank, topping off the tank with your garden hose, and believing that you actually have a full tank of gas.

      No! Your car can actually tolerate 5-10% water in the tank before it won’t run any more. But in the meantime, you can delude yourself into thinking you have a full tank of gas.

      We are at 43% water now.

      Now, I have no doubt that someone will reply with some PHD-like answer about how I am not really seeing what I am seeing.

      Just like The Wizard of Oz: ” Don’t pay attention to the man behind the curtain! ”

      Apple will weather the storm better than most, because they are actually profitable in a real sense. Profit is the economics equivalent of pure gasoline that the car runs on.

      It really is that simple. Now I am waiting for the reply that says; “it’s not that simple” Well, usually behind that statement is something VERY simple that someone does not want to recognize or do anything about.

    2. So, what is your alternative to good stocks? Gold, which is priced to include already the coming wave of inflation? There’s your bubble.

      Cash? I can’t think of a worse place to be.

      Last time we had massive inflation brought about by oil prices and a recession the stock market eventually caught up and the DOW went from 3000 to 10,000 and real estate quadrupled in value. I see the same thing happening again. Good stocks (or maybe real estate) are the place to be, but it will take time and guts.

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