Apple manipulated by Wall Street Journal before earnings?

“One week ago, I came out with a bullish report that advised readers to buy Apple (AAPL) before earnings. Though the shares have fallen since last week, I maintain that buying AAPL before earnings is the right move,” Jason Cimpl, Wyatt Investment Research, writes for Yahoo Finance. “In an unfortunate bit of timing, the Wall Street Journal reported that Apple was slashing parts orders on the same day as my bullish article. Initially, the WSJ claimed Apple was cutting iPhone parts orders by half from 65 million during the March quarter.”

“Though most investors turned negative on Apple, some devotees haven’t changed their colors. In fact, a large portion of the investor base believes the stock was a victim of manipulation,” Cimpl writes. “BGR’s Tero Kuittinen was among the first to challenge the numbers from the WSJ article. Kuittinen explained that the consensus sales estimate is 52 million iPhone units for the first quarter. The March quarter is soft (seasonality) and most analysts expect around 30 to 40 million iPhone unit sales.”

Cimpl writes, “Kuittinen rightfully questioned where the 65-million iPhone 5 number came from. Unit sales were never expected to be that high. Only 52 million unit sales are expected in Apple’s strongest quarter. And roughly 85% of that figure will be from the iPhone 5. So why would the WSJ expect 65 million from the weakest quarter? The fishy part, as Kuittinen claimed, was that ‘the current version of the WSJ article no longer cites the 65 million unit figure. Sometime between Sunday at 8:00 p.m. EST and Monday at 7:00 a.m., the Journal decided to drop the number from its article. But if the 65 million number is not right, is the estimate for halving March orders correct?’ I’d agree that the 65-million number came from left field.”

MacDailyNews Take: The 65 million unit figure didn’t come from left field, it came from Japan’s Nikkei.com. The WSJ‘s error was in carrying the FUD in the first place. Dropping only the actual number was even stupider since it’s the number that makes the revised production orders look large.

As we wrote last Wednesday:

Here’s a snippet from the WSJ‘s yarn:

Apple Inc. has cut its component orders for the iPhone 5 because of weaker-than-expected demand, people familiar with the situation said Monday, indicating sales of the latest smartphone haven’t been as strong as anticipated… Japan’s Nikkei reported Monday that Apple has slashed its orders for iPhone 5 components.Juro Osawa, The Wall Street Journal, January 13, 2013

We questioned this “weaker-than-expected-demand” bearshit conclusion that was initiated in the Nikkei FUD and repeated ad nauseam in the days afterward the second we read it. Why didn’t The Wall Street Journal?

We are left with five questions:

• Who planted the FUD at Nikkei?
• How much money did they make, if indeed they did make any money?
• Who approved the publication of this poorly-sourced, unsubstantiated, rife-with-speculation tale at the WSJ?
• How much money did they make, if indeed they did make any money?
• Just how much noise will the SEC sleep through?

Contact info:
— Editorial Inquiries at Nikkei.com: ecntct@nikkei.co.jp
— Juro Osawa: juro.osawa@wsj.com
— WSJ Letters to the Editor: wsj.ltrs@wsj.com

Read more in the full article here.

Related articles:
Japan’s Nikkei, The Wall Street Journal blow it, get iPhone demand story all wrong – January 16, 2013
Did Apple reduce 4-inch Retina display orders due to improving yields? – January 15, 2013
Analysts: iPhone 5 demand ‘robust;’ ignore the non-news noise – January 15, 2013
Apple iPhone suppliers decline on report orders cut by 50% – January 15, 2013
Apple swoon erases $17 billion from stock market – January 14, 2013
Apple iPhone 5 production cut signaling a new product release? – January 14, 2013
Apple drops to 11-month low on old reports of component cuts – January 14, 2013
The strange math of Apple’s alleged massive iPhone 5 component cuts – January 14, 2013
UBS analysts: Apple iPhone component order reduction ‘old news’ – January 14, 2013
Apple pulls down U.S. futures – January 14, 2013
Apple shares drop below $500 after reported cuts in iPhone 5 parts orders – January 14, 2013

23 Comments

        1. When Apple stock prices soar no one appears to complain, but when Apple stock prices fall it seems that the most common cause is some nefarious conspiracy.

          What a bunch of maroons.

  1. Some people want to buy cheap shares and then sell them at bigger price on later date.

    This wish is not illegal until those people use blatantly false rumours and manipulations to make the shares down.

  2. Gosh one paragraph it’s: “So the Apple defenders have a valid claim against the WSJ. The misleading article likely caused a panic that hurt AAPL.”

    The next paragraph it’s “Though many Apple zealots are screaming manipulation, I’m afraid I don’t agree.”

    Snooze flash: Misleading articles ARE manipulation, in fact the article itself was altered manipulated to hide the evidence, not a retraction or an update.

    When you have the smoking gun, bullets, bleeding body, motive, witnesses it takes an ANALyst to disagree as to whether or not a crime was committed AND you know he or she may be right. After all it could be a dead Anustralian lying in a pool of their own fecal matter, and in that’s the case it would an advancement of humanity.

    Either way I am quite pleasantly shocked that a journalist is even considering the possibility about manipulation.

    1. Well if everyone who says it’s being manipulated is investing accordingly, they should all make money. Right? I mean there is no other answer. If I knew that it was being manipulated I’d certainly invest everything I have. But I don’t know that it’s being manipulated. So I’m going to be cautious going into earnings. But there should be plenty of new millionaires tomorrow. Because so many people know how it’s being manipulated. And they’re putting their money where their mouth is. Or are they just bitching?

      1. I have no doubt that there are many who are making money if there is indeed manipulation that they are buying into. I like you do not know that it’s been manipulated per se, but I have seen my fair share of FUD regarding Apple, and I have used that to my advantage, not only to make money.

        I don’t readily agree with your statement: “But there should be plenty of new millionaires tomorrow. Because so many people know how it’s being manipulated.” Just because someone may be aware that it’s being manipulated does not necessarily mean they are aware on how it’s being manipulated. For example someone who knows how to manipulate the brakes, gas pedal and steering of a car does not necessarily mean they know how the mechanical details of that manipulation work. It’s not that they need to either in many circumstances.

        I do believe that there can be other reasons for manipulation that are not related to making money… you pointed out bitching (snicker). For this example, the WSJ it could be a premeditated effort to drive the stock price down or it could simply be poor journalism or a mistake that was corrected in a less than open fashion.

        1. Manipulation in this situation means that the stock has been driven down with no justification. Thus anyone who believes this should be invested and make plenty of money after earnings. I have no idea if earnings will be good or not. And I don’t believe that Apple is manipulated anymore than other companies. It simply gets a lot of attention. Especially here. Especially by fanboys.

          1. No sir. You are once again WRONG.

            It’s hard to make money. Do you think you can outbid a computer? Do you pay for high speed lines to facilitate not only your order flow, but real time quotes with market depth (mad bandwidth)? Are you running an 8 screen rig controlling a blackbox veritable super computer in a close proximity data center down the rack form NYSE/NASDAQ fiber hookups? running algorithms to auto trade based on keywords in the news? Are you a big enough client to enough of the key brokers to get access to their liquidity pools? to get choice commision rates? no? Well, then even if you know it’s going to happen good luck getting any choice fills that aren’t seconds away from flipping on you. How many open orders can you float in the market? Do you have to wait for a cancel on your open order before putting out a new one? Can you go long or short (naked short at that) at will?

            Dude, you are naive about how the market works now, but it’s not your fault. So anyways- to answer your Q- there is certainly manipulation and collusion going on. And no, it;s still not easy to follow the gravy train.

            1. Dude you’re the one who is naïve. And yes, we’ll all understand computer trading and it’s pitfalls to the average investor. And yes, I certainly understand algorithms and their use in trading. But it’s good to know that you’ve read articles and or watch CNBC a lot. That’s impressive. Naked short? Dude are you nuts? I’m neither a speculator or daytrader dude. But dude, it is possible to invest and make money in today’s market. But by your comments you sound as though you are not an investor rather someone who just simply posts comments. And that’s okay, dude. Nothing wrong with being on the sidelines. Dude.

            2. let’s not fool ourselves, shall we? You are naive. You don;t even know wtf I am talking about and thus can’t respond to it in any meaningful way. And actually, I don’t watch CNBC. I don’t even have cable. You don’t need that when you actually have the experience. IMHO, the only way for a mom and pop investor in this market is to pick a good stock and hold.

              but seriously, you are naive. just stop fighting it and wise up.

          2. Hmmm let’s see:

            1. “Manipulation in this situation means that the stock has been driven down with no justification”

            I concur that the stock has been driven down in this particular case, but once again what is the justification (desire to drive the stock down, poor journalism, FUD or some other parameter) is not perfectly clear in my opinion.

            2. I have an idea that the earnings will be good, but that is relative. Let’s just say that I believe Apple is a profitable company and that they will have made a profit this quarter. Whether or not that turns into a stock increase over the short term remains to be seen but over time (years) the stock goes up, and that is what puts a smile on my face.

            3. I do believe that Apple is manipulated more than other companies because it gets a lot of attention, not only here obviously but elsewhere, and that is to be expected as it is a very large and very profitable company. It’s not only the fanboys but the fangirls as well, not to mention trolls, analyst, Apple employees, droid fans of all ages, microsoftians below the surface and all sorts of people. That’s what makes this place so much fun, it isn’t a uniform uninformed society.

        2. RW-

          Like your motor vehicle analogy:
          “For example someone who knows how to manipulate the brakes, gas pedal and steering of a car does not necessarily mean they know how the mechanical details of that manipulation work.” The latter, that would be the SEC.

          In the article, FINALLY, hopeful to read some skeptical journalists exist questioning the accuracy, and also suspect, the TIMING of the WSJ article during earnings season.

          Article: “Instead, their bearish article caused a two-day rout that erased $38 billion of value and took the shares 7% lower.” Imagine that. The power of one well placed FUD hit-piece left unchecked and parroted in nano-seconds across the media and trading world landscape.

          Manipulation Grande!!!

          Whether an innocent/ill informed mistake or premeditated FUD is the billion dollar question for law enforcement and copy editors.

          Deleting the challenged number in the middle of the night sans an explanation? WSJ newsroom management disappoints on many levels.

          Certainly, Apple opposition research exists and it is growing along with Apple earnings. How Apple FUD permeates the largest media markets and analyst reports that traders rely on is the billion dollar question.

          The most recent FUD FLAG was the collective frequency of negative Apple articles closely coinciding with the most aggressive roll out of new Apple products ever for a holiday quarter.

          Remain vigilant good MDN citizens. FIGHT FUD! 🙂

          1. Thanks for the post Coal Cracker, you certainly make some good points. I believe there used to be a time where journalistic integrity was more the norm than the exception. I have no qualms about voicing one’s opinion, arm chair suggestions and various interpretations of data but it seems that these days the media is pushing its agenda using made up facts without any consequences. It’s a sad state of affairs, one could spend a lifetime fighting FUD but my strategy has always been to take advantage of it whenever possible, especially when people seem blinded or lacking common sense. Patience is often key. Anyway, I believe Apple stock will rise regardless. I have seen these dips before, it’s like the tide and I enjoy the ride.

            Anyway, the earnings are coming up soon, and often that makes the stock take a dive but it will come back, you can’t keep a good company down forever.

            Cheers.

            1. Right back at you Road Warrior, thanks.

              “I believe there used to be a time where journalistic integrity was more the norm than the exception.”

              Sad to say, those days are most likely gone. The print media continues to lose circulation and profits on a daily basis, and at the same time, they have dangerously reduced newsroom staffing levels.

              We can expect more of the same shoddy reporting as the transition to digital delivery throws more limited resources behind chasing hits, twits and likes.

              Yes, Apple stock will be fine. That said, Google is up today close to $40, and for what? My faith is already shaken with today’s media and now, losing faith with sound time-tested market financials trumped by FUD.

              Now to Apple earnings.

  3. I don’t see any clear reason related to the fundamentals of Apple that should have driven the stock down from $700 to $500 in just a few months time. It seems to me, so far, that there’s only rumors and speculation plus the possible tax situation that likely has driven Apple down this far. I don’t see why suddenly the news media would turn on Apple for no reason at all. They really seem to be going out of their way to say negative things about Apple.

    Instead of praising various companies for creating better products, the news media is constantly defaming Apple and only Apple. There are plenty of other companies struggling in the smartphone industry they could go after. I just think that Apple is still doing very well financially as a company, but the news media is going out of their way to conclude that Apple is a failing company. All these things just seem so fishy to happen so quickly over the past few months. I doubt Apple is being hurt financially, but I think the negative news is driving away shareholder value (share price) from Apple making Apple seem like a potentially poor investment. If those stories are proven as lies and Apple is selling as many products as usual then I would have to conclude there is manipulation or an Apple defamation campaign going on.

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