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Apple Stock Split Rumor Adds Over $100 Billion In Capitalization To The Market In Matter Of Minutes

Tyler Durden's picture




 

To all who trade this manipulated lunacy, you have our sympathies. A 1% market move equates to well over $100 billion in market capitalization. And this value just materialized because Apple stock will (allegedly) be $50/share instead of $200, so the quadrillions in cash on the sidelines can buy buy 4 shares where before they could buy one. Just brilliant. Goldman/JPM/33 Liberty just raped everybody for lunch. And to complete the lunacy, this just made top Bloomberg news. The absurdity is just surreal. In other news, the Greek revolution will be televized in 1 minute YouTube 360x240 mp4 clips via iPhone.

Feb. 25 (Bloomberg) -- U.S. stocks pared losses, rebounding
from the biggest drop in three weeks, as the Dollar Index
reversed its advance and Apple Inc. shares jumped.

The Standard & Poor’s 500 Index retreated 0.6 percent to
1,098.49 at 2:03 p.m. in New York after slumping as much as 1.7
percent. Apple pared its drop to 0.2 percent.

Last Updated: February 25, 2010 14:05 EST

 

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Thu, 02/25/2010 - 15:26 | 245340 BlackBeard
BlackBeard's picture

soo.....did everyone just forget that board lots are like totally pre 2000?  retailers could have purchased 25 shares of AAPL when it was trading @ 200 before this news.  whoopdie doo.

Thu, 02/25/2010 - 15:27 | 245346 bugs_
bugs_'s picture

Its so nostalgic.  Reminds me of Naz 5k.

Very bubbleiscious move.  Must dig deeper
and see if this is just an exec options
issue or if there is an M&A issue.

Thu, 02/25/2010 - 16:33 | 245475 MarketTruth
MarketTruth's picture

It is indeed nostalgic. Apple rumor huh? WAIT, that is a JIM CRAMER technique of stock market manipulation. Here is the video:

www.youtube.com/watch?v=gMShFx5rThI

The IDIOTS on Wall Street fall for it again and again. Barnum was right... every minute.

Thu, 02/25/2010 - 15:33 | 245347 Racer
Racer's picture

In the 'old' days, a split was long term very negative for the stock!

And is this going to mark the top for AAPL!

Thu, 02/25/2010 - 15:41 | 245381 Anonymous
Anonymous's picture

Makes it easier to unload to retail. Retail says "Ooohh! Now I can buy AAPL for only $50.00!"

Or, even better, the other class of buffoons that always emerges here are the ones that say, "Get in now before it splits!"

Thu, 02/25/2010 - 16:55 | 245530 Anonymous
Anonymous's picture

Do you mean buffoons like people that bought BRK.B before the split? 65 to 80 is a real bummer, you are right.

Thu, 02/25/2010 - 15:29 | 245349 truont
truont's picture

"Yeay!  AAPL stock split!  That means I get 4 stocks instead of just 1!  I just quadrupled my stock!  Yeay!" 

They must've dug up the dot-com bubble investors out of cryo-storage, thawed em out, and told them about the AAPL stock split.  That is the only explanation for this irrational exuberance.

Thu, 02/25/2010 - 15:48 | 245401 Divided States ...
Divided States of America's picture

Do you mean I just made four times my money if I buy AAPL now??? Whoopi Doo, I am buying now.

Thu, 02/25/2010 - 15:35 | 245351 Racer
Racer's picture

What difference does a split make anyway?

You buy the same amount in money terms don't you?

 I suppose they think if you get 4 shares instead of 1 the sheeople think it means you can sell them all now for $200 each!

Or they see it as quadrupling in value because, well it was split so it must go back to the $200 level for sure

 

 

 

Thu, 02/25/2010 - 15:42 | 245384 Rick64
Rick64's picture

Brings in more investors that would be able to afford it. Has more room to rise.

Thu, 02/25/2010 - 16:05 | 245450 chunkylover42
chunkylover42's picture

the retail investor that can't afford $200 Apple shares but gobbles up the $50 Apple shares isn't buying anywhere near enough to make a difference after being "drawn in".  The dollars that matter are institutional managers, market makers, hedge funds, etc., any one of whom is moving hundreds of thousands into or out of the stock at any given moment.  They don't care if it's $200 or $50, it's a math exercise to them.  I'm not even sure they care what the valuation is, but that's a different story.

In other words, retail investors being drawn in means nothing. 

 

Thu, 02/25/2010 - 15:43 | 245389 Al Huxley
Al Huxley's picture

The 'thinking' goes like this - if AAPL at $200 moves $20, that's 10% but if AAPL at $50 moves $20, thats 40% - so obviously, this is a great thing, because now we'll all get 40% profits instead of 10% profits next time Apple moves $20!

Thu, 02/25/2010 - 15:59 | 245432 Anonymous
Anonymous's picture

in that case, they should have split it 20:1

Thu, 02/25/2010 - 17:07 | 245583 Anonymous
Anonymous's picture

Who the hell thinks like that?

Thu, 02/25/2010 - 20:36 | 245969 Anonymous
Anonymous's picture

Irrational is the new rational!
Haven't you heard?

Fri, 02/26/2010 - 23:46 | 247693 Anonymous
Anonymous's picture

The same kind of people who think exchanging a 25 MPG car for a 50 MPG car is better than exchanging a 10 MPG truck for a 20 MPG truck. You know, people who failed mathematics and didn't get a high school diploma.

Thu, 02/25/2010 - 15:32 | 245360 Anonymous
Anonymous's picture

I was wondering what turned things around, this kind of manipulation has the secs' stamp of approval.

Thu, 02/25/2010 - 15:36 | 245370 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Always on time these moves.

Thu, 02/25/2010 - 15:37 | 245375 Racer
Racer's picture

More like that key level quant jump started the market at the 1090 level on the S&P to get the dead battery started again!

Thu, 02/25/2010 - 15:46 | 245398 Bear
Bear's picture

Seems most reasonable case as jolting (vol spike) started at 1:41:00 ... and AAPL is at 200 down .20% on the day

Thu, 02/25/2010 - 15:39 | 245378 Rick64
Rick64's picture

Berkshire B shares, Apple, whos next GOOG?

Thu, 02/25/2010 - 15:41 | 245382 Anonymous
Anonymous's picture

The theater is about to burn to ashes. The last three days' manipulation is the clearest signal yet of total and utter desperation by the manipulators.

Thu, 02/25/2010 - 16:55 | 245528 Prof Gulliver
Prof Gulliver's picture

Desperation? Hardly. They are supremely confident in their ability to manipulate anytime they want to.

Thu, 02/25/2010 - 15:42 | 245386 Anonymous
Anonymous's picture

Look, the only reason the market dropped to start with was so that Geithner could offload another $30 billion of toxic sludge to those few non-central bank fools who are still bidding for treasuries. The apple rumor is as good a reason as any other to go back up.

Thu, 02/25/2010 - 15:42 | 245387 Going Down
Going Down's picture

 

"In other news..."

 

Iceland Quits Icesave Talks With U.K., Dutch, Official Says

 

www.bloomberg.com


Thu, 02/25/2010 - 15:44 | 245391 BlackBeard
BlackBeard's picture

let's hope those Icelanders can avoid major assrape.

Thu, 02/25/2010 - 16:10 | 245454 Anonymous
Anonymous's picture

The Icesave issue faces a nationwide vote on Saturday, March 6th. Perhaps the Icelandic officials not only objected to the terms, but also have a good read on popular sentiment, and detect that the referendum result will indicate that the population would rather default, than be held responsible for the bad business dealings of others. What a concept!

Thu, 02/25/2010 - 15:46 | 245397 Anonymous
Anonymous's picture

Farqing hilarious. Even funnier listening to that dumb broad on CNBC reporting it as the reason for a 1% spike ACROSS THE BOARD in asset prices. INCLUDING THE EURO.
LOL.

Thu, 02/25/2010 - 15:50 | 245402 Racer
Racer's picture

oh and now AAPL say no stock split, but does it matter? The shorts have been gunned again!

 

And who ever started the false rumour to push the market up will not be caught or punished... because the market went UP

Now if it had gone down....... all the wrath of the law would be on them.......

Thu, 02/25/2010 - 15:50 | 245407 Anonymous
Anonymous's picture

Apple is one of the only fairly valued companies, imho. Subtract out the cash, and its trading for 12x forward earnings.

Most of its earnings in the last couple years were hidden by the deferred revenue/earnings model on the iPhone. This is no inflated bubble like Amazon.

Thu, 02/25/2010 - 15:51 | 245409 Anonymous
Anonymous's picture

Would you like your pizza cut in 8 slices or 12?

Hmmm...I'm pretty hungry today, you'd better make it 12.

Thu, 02/25/2010 - 15:52 | 245411 Anonymous
Anonymous's picture

GS must have been behind this.
Apple does look tasty though with almost $40B cash on the balance sheet.

Thu, 02/25/2010 - 15:54 | 245417 No More Bubbles
No More Bubbles's picture

Next time I order Pizza -I'm going to demand it be discounted by asking them NOT TO SLICE IT!

After all, a pizza is worth more if it's sliced into more pieces, so it should be cheaper when it's whole.

I'm utterly stunned that anyone still thinks a SPLIT makes something more valuable.  Then again, we're dealing with a market of retards since we're about 80% higher than we'll be in the future.....

Some people just can't connect the dots.....

Thu, 02/25/2010 - 15:56 | 245423 Grandpa Bear Hug
Grandpa Bear Hug's picture

Where is Mary Schapiro? She and the SEC are a complete and utter joke. She and her band of incompetents pushed through a new short rule however I guess manipulating the market in an upward direction is deemed a fair and orderly market.

This is beyond insanity.

Thu, 02/25/2010 - 17:27 | 245650 deadhead
deadhead's picture

Grandpa....Mary is on the team with Bernanke who is buying the market as we know.

definitive proof here   http://www.archives.gov/federal-register/codification/executive-order/12631.html

Thu, 02/25/2010 - 15:59 | 245433 pinkboxtrader
pinkboxtrader's picture

brokers get more commissions when the stock splits

Thu, 02/25/2010 - 16:03 | 245446 GlassHammer
GlassHammer's picture

Its not even like watching a casino becuase its not rational enough.

Thu, 02/25/2010 - 16:29 | 245468 Chopshop
Chopshop's picture

maybe, just maybe the 'news' announcement happened to be at about 'the' time 'the mkt' was bout to bottom for the session  or  it was well-placed / well-timed to coincide with such, from someone with ear n eye toward mkts.

Thu, 02/25/2010 - 16:38 | 245482 Anonymous
Anonymous's picture

Whats the difference?

Its 5x 2015 earnings and 1x 2015 cash any way you split it?

OR... according to ZeroHedge, no one has any cash to buy iPhones, IPods, and iPods and Macs... which fits well with the $65B in revenue and $25B in cash-flow AAPL will do this year.

Oh yeah, it fits well with Coke buying Coke bottling for a 50% premium and $15B (lots of M&A this week... hmm?). It fits well with GGP being offered $9/shr and trading up to $13. Course 1 oz of gold used to buy you 10 shares of SPX (back in early 80s). Now it buys you 1 share (forget all those divs you missed). Give it another decade... sad, sad trade.

-BigBagHolder

Thu, 02/25/2010 - 17:34 | 245668 Anonymous
Anonymous's picture

The dollar index has broken correlation with the equity markets the past several week. How does it all of the sudden the cataylst that blasts us 1.5% higher today after being irrelevant for 3 weeks now?

Thu, 02/25/2010 - 17:37 | 245682 dark pools of soros
dark pools of soros's picture

you are all blaming it since its just a psychological move... but wait.. THE WHOLE MARKET IS PSYCHO-LOGICAL so of course it makes sense and will attract greater fools

 

3 months from now new fools will come to the game and not even look at past charts and see it under $100 and buy it up!! UPP UPOPPPPP!!!!

Thu, 02/25/2010 - 17:55 | 245713 Anonymous
Anonymous's picture

Where does the $100B in market cap on a 1% move come from? AAPL has ~909M shares outstanding. At around $200/share a 1% move would be $2B, but $100B is ridiculous...Apple's entire market cap isn't even $200B.

The split itself doesn't matter, but the market manipulation regarding the news is atrocious.

Thu, 02/25/2010 - 20:27 | 245956 Anonymous
Anonymous's picture

$100B for the entire equity market...not just AAPL...

Thu, 02/25/2010 - 18:10 | 245739 Blake
Blake's picture

Tyler -- LMAO.  That last sentence was one of the funniest things I've read all month

Thu, 02/25/2010 - 18:31 | 245768 Anonymous
Anonymous's picture

I think you meant 100 million

Thu, 02/25/2010 - 18:42 | 245786 Tripps
Tripps's picture

as someone said, even a casino is more rational

 

i think the rule is this, if you don't understand why the market is doing what it is...get out to cash. would have saved you in 2008 when the volatility started in aug 2007 if you trusted your gut and didn't chase returns

Thu, 02/25/2010 - 18:43 | 245787 Anonymous
Anonymous's picture

Hey, I bought it and made 1.60 on it. if I had guts could have taken 50 cents more. Sometimes rumors work out.

Thu, 02/25/2010 - 19:44 | 245894 MyKillK
MyKillK's picture

Apple is no stranger to splits. I bought in just before their last split (2005?) and it worked out very well. If the company knows what it's doing, a stock split could be the best way to grow market capitalization.

Thu, 02/25/2010 - 23:56 | 246258 bchbum
bchbum's picture

I heard google was going to split 12-1

Fri, 02/26/2010 - 02:46 | 246366 Anonymous
Anonymous's picture

sitting right at teh 50 yardline

http://stockcharts.com/h-sc/ui?s=aapl:gld

Fri, 02/26/2010 - 06:04 | 246419 theprofromdover
theprofromdover's picture

I think some of the posters are serious. ?

er......

You can promote greater volatility if the shares are split into 4.

It is volatility that drives the market.

That and dumb lemming stupidity.

Fri, 02/26/2010 - 08:36 | 246454 Anonymous
Anonymous's picture

Stock splitting is a standard practice that companies do all the time when there stock price gets too large for the typical investor to be able to invest. The conspiracy theory people on this site are a joke. I guess it brings in add revenue though. Yellow journalism at it's best.

Tue, 03/09/2010 - 15:55 | 259440 Anonymous
Anonymous's picture

When it comes to stock splits there are 3 kinds of people:
1. Those who don't understand why stocks split, and don't bother to care
2. Those who don't understand why stocks split, and react by posting idiotic comments that only relate to price and purchasing power
3. Those who understand why companies split their stock and know how to profit from it

Which are you?

Fri, 04/16/2010 - 11:12 | 304049 Tom123456
Tom123456's picture

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Thu, 01/27/2011 - 01:21 | 908571 paragshah12
paragshah12's picture

The Stock Split would allow many more people to become AAPL Shareholders. It would also take the joy out of Shorting this stock which is the favorite yo-yo of the Hedgefunds. I would love to have four shares at $50.50 per share for every one of my $202.00 shares.
http://www.prime-targeting.com/apple-of-our-eye/

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