“It has been a good two months to be an Apple (AAPL) shareholder. After watching a steady decline in its share price since September, which saw the stock plunge from $700 a share to less than $400, the stock has gained more than 100 points in the last 8 weeks,” Bret Jensen writes for Seeking Alpha.
“The rise has primarily been driven by what some investors would call ‘financial engineering.’ Pressed by activist investors David Einhorn and now Carl Icahn, the company upped its stock repurchase program from $10B to $60B. The company has already bought back some $16B in stock within this program. In addition, Apple raised its dividend some 15% to $3.05 a share,” Jensen writes. “These changes have been very important in changing investor sentiment on the stock and to arrest its nine month decline. However, it appears the gains triggered by these efforts have run their course and the stock could be locked into a somewhat tight range of ~$480 to $520 a share while awaiting further developments. The ‘first stage”‘ of Apple’s comeback appears complete.”
Jensen writes, “In order to break out from this range on the upside and start to head higher, hopefully above the all-time highs seen in 2012 – the company needs to succeed operationally from a new product and distribution front. Here are the key items the company has to execute successfully to ignite the next stage of stock market appreciation.”
Read more in the full article here.
MacDailyNews Take: The fall was primarily driven by what some investors would call stock manipulation, oh, sorry, “financial engineering.”
My dream for my company is to have it experience a similar “comeback” over a similar period of time.
solution – wait and see – patience is the game
Either the banks were overloaded in Apple, or they had to get out to prop up other investments that are heavily leveraged. My guess is that it’s both and that some of the hedge funds went with the flow.
So what is the best route for Apple? Keep making money and keep buying back stock. Get approval for another big buyback next year (or the year after), and keep it as a big stick to the threat of Wall Street FUD.
The question is whether a sooner buyback will help prevent another pump and dump cycle. Personally, I think it may take several years to remove the ugly influence of the street on the stock. If Apple really is a “dead water” stock, then Apple could simply buy up whenever they felt like it. But I doubt the street makes it easy for Apple…
This is the third time my AAPL stock was cut in half. Look at the chart from the 2000 Y2K bubble to now. Notice the climb after each of the prior two dips. Yes, WOW! Where do you think AAPL will go now that Apple has cleared the field. Only Samsung in the iOS device markets. Mac with the Mac Pro will have their run. Apple now has 5 or more giant server farms coming on line.
If the Mac Pro is the little black Home Entertainment Hub that I think it is and if the apps are opened up to the AppleTV. And the new server farms with iTunes are set to stream to these Apple powered living rooms. What do you think will happen to the AAPL stock over the next year? Are you in yet?