Is Apple’s stock manipulated?

“In one of my previous articles, I argued that Apple (AAPL) might have become a speculative stock,” Kim Klaiman writes for Seeking Alpha.

“I have been warning for a while that the stock has gone up too far too fast. When the stock was going up almost every day for no visible reason, I asked a simple question: what do we know today that we didn’t know a month ago?” Klaiman asks. “Some people would argue that funds were buying the stock in anticipation of the dividend. That argument simply doesn’t hold. A $10 yearly dividend means nothing for a stock that can move that much in a matter of minutes. Are you telling me that the stock rallied $130 in one month in anticipation of a $10 dividend?”

Klaiman writes, “Today after the stock is down from $644 to $530, I must ask the same question: what do we know today that we didn’t know a month ago that caused the stock to lose $120 Billion of its market cap? The obvious answer is: speculation. When the stock is going down now almost every day, many Apple bulls would argue that the stock is manipulated. It is interesting that they didn’t think it is manipulated when it was going up at the same speed. The simple question is: how can someone manipulate a $600 Billion stock?”

Read more in the full article here.

26 Comments

    1. @”… When the stock was going up almost every day for no visible reason,…”

      Right, no reason, except that Apple’s stock had been held down for almost a year with trend even lower than a LINEAR increase (while any normal stock should behave exponentially, i.e., under constant conditions, the stock should rise the same fraction per year).

      What we have seen is a market correction (with some overshoot to 640, granted, of 75USD/share). Given its behavior in the last 3 years, it should now be at 550-600.
      In de last 2 weeks we have seen a correction to the correction. The overshoot has faded away and, in the absence of FUD, AAPL should continue rising at 50%/year.

      1. I was going to try to educate Kim, but it’s not worth the effort. Apple’s EPS was in the single digits with 70% growth. It was the first quarter without SJ in the world at all, and they hit a home run. And whether they announced a dividend of $100 or $.01, it will allow mutual funds who cannot buy stocks that don’t pay a dividend to finally buy AAPL, not for the dividend itself, but for the 70% growth! $640? Should have been $740! Manipulated? Hell yes! Take away naked shorting and reinstitute the uptick rule and see what happens to AAPL volatility and valuation. We’ve hit the Max Pain numbers almost exactly for how many out of the last 8 quarters?

  1. what?! manipulated?! I’ve never heard anything more ludicrous! things like this cannot happen thanks to the tireless efforts of the SEC.

    manipulated. pfft!

  2. Hmm… gee, the stock drops more than $100 and goes down and down and down – right up until options expiry day (last Friday) and, WHADDAYA KNOW – this morning it’s headed back up.

    The answer: Yes.

  3. “I have been warning for a while that the stock has gone up too far too fast. When the stock was going up almost every day for no visible reason…”

    Noob. It was going up because of it’s obscenely low p/e ratio, strong sales, strong innovation, cash rich, debt free, etc.

    But he is right that there’s no explanation for it going down.

  4. The stock had a big jump as a result of the huge growth in iPhones, iPads and Macs. The momentum continued with the release of the iPad3.
    In that time there was little negative chatter about the stock. Just before the last quarter’s earnings release the negative chatter increased.
    As a result aapl reached the high of 640 and then was pushed down.
    As for putting all you eggs in one basket I do have a significant amount of apple stock. It has served well an grown close to 100% a year.
    Will I trade out of the stock. No way. Nothing else in my portfolio had performed this way.
    I will sell if I feel Apple is starting to lose it’s way. There is nothing I see that even remotely suggests that yet.
    The volatility we see is the brokers like the author himself running the shorting game. When the system allows you to make money in falling stocks it makes it open to manipulation.
    The best approach for me is to stay in and ride the ups and down because the general long term trend is to go up.

  5. I read somewhere that they thought AAPL was being sold off so people could raise money for the FaceBook IPO. I didn’t believe it, but that IPO was late last week, and now look. Could it be?

  6. There are a large number of money managers who play the momentum game to generate returns. They jump on a stock that is trending up and bail when the momentum starts to fade. Looks to me that this is what happened to AAPL over the past month. Not sure that this qualifies as stock manipulation.

  7. The reason the that we don’t think it was manipulated when it was going up is obvious. The earnings were going up roughly 80%/yr. for five or six years in a row. Name another stock with that record. The real mystery is why hasn’t the stock appreciated much more than it has. Any manipulation has always been on the down side. The stock should be at $1000.

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