Why one CNBC ‘Fast Money’ trader just shorted Apple

“Shares of Apple have climbed nearly 20 percent so far this year, but according to one ‘Fast Money’ trader, the tech giant could be setting up for big losses in the coming months,” Michael Newberg reports for CNBC.

“On CNBC’s “Fast Money,” Brian Kelly of Brian Kelly Capital said that he had decided to short Apple’s stock during Thursday’s session. ‘I’ve got a great risk-reward trade setting up here; $95 is where I shorted it today, $101 is my stop,'” Newberg reports. “According to Kelly, Apple’s current price action is reminiscent of the buildup leading to the release of the iPhone 5 in September 2012. ‘You had the stock come right up to $100, you had all these things go on in August into September, and boom, the stock went from $100 down to $55. It looks to me like the same thing is going on here,’ he said.”

Newberg reports, “‘I think all the good news is priced in,’ Kelly said, regarding the anticipated September release. ‘Once we get the iPhone 6 release, what else is there?'”

Read more in the full article here.

MacDailyNews Take: iCal’ed.

[Thanks to MacDailyNews Reader “Jax44” for the heads up.]

28 Comments

    1. Brian Kelly of Brian Kelly (Loss of) Capital:

      “Once we get the iPhone 6 release, what else is there?”

      On that tremendously illogical investment logic, you could predict the downturn of just about any company in the world.

      What else is there? Well, the 4.7″ iPhone will sell in record numbers and shortly be joined by the larger iPhone 6 (according to many rumors). Eventually there will be the iPhone 7, 8, 9, and so on. New iPads. New Macs. Evolution of AppleTV. Evolution of iCloud. Wearables. Embedded computing in clothing, and eventually people. And who knows what the freak else?! Brian is the kind of person who, back in the early 1980s, could not have imagined the need for more than 640KB of RAM, or a laser printer, hard drive, cell phone or iPod. Thankfully, Steve Jobs and Woz and others did and achieved convergence in many great technologies.

      If this guy did not predict the previous major AAPL price drop (to which he now lives in fear), then why believe him when he attempts to (improperly) apply AAPL history to predict the future. Fear is not the way to succeed in the stock market, which is inherently driven by risk.

      Past performance is not an indicator of future results. And even when history does repeat itself, it is not always easy to realize that until after it happens. But you can live in fear of the future…and fail.

      1. You left out IBM. New opportunities teaming up with IBM, their Watson and Apple’s SIRI blending their skills and abilities, and today, we found out that IBM has built a computer chip that functions like a brain.

        All these things didn’t happen a year ago. Clueless shorting again.

        1. I did neglect to include the IBM partnership, and it could turn out to be one of the most significant moves by Apple in years. I suspect that Microsoft, Google, Samsung, and others are still in shock.

          Honestly, the IBM partnership never occurred to me. Once it was announced, however, it seemed like such a good and natural fit.

  1. The cacophony will start now, but these people will not REALLY put their money on that position. They will convince as many lemmings to leave to drive the price down, then when it gets low, they’ll buy massively right before the iPhone launch and cash in on it like riding a rocket to the moon.

    Kelly is a slimeball. So are most of the other Apple “shorters,” though I’d bet some pretty safe money that their position isn’t really short.

    Scumbags!

    1. There wouldn’t be anyone like that appearing on CNBC and telling people to short Google, Netflix or even Microsoft. Apple is simply an easy company to short for reasons I really don’t quite understand. Anyway, nothing has actually changed with Apple despite everything the company has going for it. Don’t get me wrong. I’m perfectly satisfied the way things are only because I’m so far ahead in gains only an apocalypse would affect me.

      I’ve never quite figured out the logical reason Apple went from $100 to $55 in 2012/2013 but it did and I suppose it could happen again. I don’t believe it will but anything is possible with Apple. It would be nice if Apple bought a news channel to offset CNBC’s nonsense but I guess that isn’t very likely to happen. What CNBC is allowing seems somewhat dishonest or misleading to investors.

      1. “…for reasons I really don’t quite understand.”

        Neither do I, but I do have my own theory.

        Most of these Apple naysayers and shorters are ex-windows fans (or maybe still are, on the outside). They are resentful that the horse they chose to ride has come up lame and the Apple jockey has come up on the outside and has passed them by. It’s hard for them to swallow the fact that they put their money on the wrong horse.

  2. Wrong. This is more like what happened leading up to the iPad.

    Everyone is waiting for iPhone 6 – the large screen is going to sell a ton – as will the typical size.

    Shorting the stock was a stupid move. The stock price is going up 25% – you heard it here first.

  3. The current “price action” isn’t exactly like it was in 2012. There was a 5.5% dip a week or so before the earnings were reported in July 2012. After the report the stock went from $580 to $705 in September 2012. There was no significant dip in August 2012.

    This year the stock went up after earnings and is now down around 5% in August. If the “price action” is the same as in 2012 then the stock should be around $115 by the first day of iPhone sales.

    1. Also, let’s not forget that institutional ownership in Apple is still low. So who exactly is going to move the stock down? Retail investors? Before an iPhone Launch?

  4. Another speculator who hopes to drive the stock downward on his schedule, so he can make quick money. He neither knows nor cares about Apple and those who use its products.

    “Once we get the iPhone 6 release, what else is there?” he says.

    Well, tons of sales of the iPhone 6. And there’s Yosemite and iOS 8. Most importantly, Apple has multiple software and hardware products coming down the line, legendary management of product production and the ability to maintain profit margins that are the envy of the industry.

    If this jerk succeeds in driving share price to $55, I will buy AAPL. True investors have a longer term perspective.

  5. The tool is most likely lying. If people follow this tool by shorting apple, they will get short squeezed and apple will surge into the stratosphere on their backs.

  6. ‘…of Brian Kelly Capital’. Says everything we need to know. Not to mention he disregards everything else that existed last September like the (as we now know) delusion that Samsung was going to eat Apples market share and go on to bigger an greater things in the market. Clearly he hasn’t noticed things have changed around 100% since then and we all know that Samsung foundations are built on quicksand.

  7. What else is there? Amongst others is that even without growth of any sort, Apple is still a company raking in massive amounts of cash, more than they can spend, and this would continue for a good few years even if they dropped the ball somehow. These profits doesn’t just disappear, they’re of value and the price going to $55 would be madness due to that alone.

  8. The 7-1 stock split makes shorting much more difficult because you still need to have agreement on control of the stock to be used to short. Also, August is traditionally the month where the wealthy Wall Street types head for the Hamptons.

  9. It constantly amazes me how Google and Amazon stocks are allowed to BUBBLE their value FAR beyond reality. (Thankfully Amazon is currently deflating as reality dawns on investors). Meanwhile, Apple’s value lives in a relative vacuum, waiting to be brought up to a realistic valuation.

    Then morons like this guy pull a short manoeuvre on Apple, as if someone just drilled a hole in their head and filled it with molasses. Now 1+3=5. Well done. 😛

  10. This guy acts as if the stock market is something more than a concept, a thing with a mind and a decision-making process. When in reality it is nothing more than a congomeration of hundreds of millions of people making guesses.

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