Neil Hughes
Shares of Apple stock were bludgeoned down to their lowest price in over a year in April, thanks in part to an assault by short sellers who took a record interest in the company late in the month.
Short interest in Apple doubled to a record 41.6 million shares between April 15 and April 30, Philip Elmer-Dewitt of Apple 2.0 revealed on Tuesday. In his words, shares of Apple were "mugged" by short sellers, who drove the price of AAPL stock to its lowest level in over a year.
Ahead of its second-quarter earnings report, shares of AAPL dropped to just over $385, a level not seen since 2011. Apple's stock began its tumble in September of 2012, around the launch of the iPhone 5.
Many investors believe Apple put a floor under its share price in April when it announced a massive $100 billion capital return program that will run through 2015. That includes an increase of Apple's quarterly dividend by 15 percent, and a $60 billion share repurchase plan, which is the largest in history.
In particular, Apple's capital reinvestment plans have won over Greenlight Capital Chairman David Einhorn, who made waves earlier this year when he attempted to persuade the company to offer preferred shares. Also Since then, short interest in Apple has cooled off. Dewitt noted that by May 15, it had fallen nearly 38 percent to to 26 million shares.
As of Tuesday morning, shares of AAPL were trading above $440, still well below the company's 52-week high of $705.07, but above its low of $385.10 in late April.
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73 Comments
This is an outrage! I knew something like this was happening.
Big deal. It can work both ways. Short sellers getting squeezed (and therefore being forced to buy to cover) are, on the other hand, believed to be responsible for a large part of Tesla's remarkable share price run-up (see, e.g., http://bloom.bg/12tGflk).
The bottom line with AAPL currently is blah sentiment. Unless that changes, it'll be a back and forth in the $400s. Nothing much can change that except for real news.
As I've said before, it's a bleak summer for AAPL (and AI, which is forced to cover Samsung's every move).
Stock manipulation is illegal. People who have spread lies about companies to drive their stock prices one way or the other (mostly down) have rightfully gone to jail for this. Why aren't regulators doing anything about the obvious campaigns of lies and smears against Apple? I guess the Rule of Law isn't what it used to be.
New laws.
Big deal. It can work both ways. Short sellers getting squeezed (and therefore being forced to buy to cover) are, on the other hand, believed to be responsible for a large part of Tesla's remarkable share price run-up (see, e.g., http://bloom.bg/12tGflk).
The bottom line with AAPL currently is blah sentiment. Unless that changes, it'll be a back and forth in the $400s. Nothing much can change that except for real news.
Which means, bottom line, that stock prices CAN be manipulated by large investors like hedge funds. It means the small or individual investor is at the mercy of these thugs, and it's all nice and legal. No wonder burying your money in a tin can in the back yard sounds good to some people.