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How Apple Lost One American Airlines In Market Cap In Under A Minute
Earlier today, just after the market open, the one company that everyone had once again piled into, and which as of September 30 was the most popular company in the hedge fund community with at least 175 "smart money" institutional fans...
... based on expectations that with every other stock and asset becoming increasingly illiquid, at least this one would preserve its liquidity come hell or high water, flash crashed.
The company is Apple, and its ongoing intraday weakness is also the primary reason for the Nasdaq's underperformance.
So what happend? Between 9:49:54 and 9:50:43 Eastern, AAPL plunged from nearly 6%, from $117.69 to $111.27, a moved which wiped out about $35 billion or one American Airlines (or one Transcanada, or one Travelers, or one Lukoil, or one Carnival, or one Christian Dior, or one Hyundai Motor Company, or one Takeda, or one State Street) in market cap.
As the following chart from Nanex shows, in today's latest flash crash, the one thing that sent the company plunging was that like in most other flash crash instances, suddenly out of nowhere, a surge in sell orders hit the tape, with some 3,400 trades taking place every second, and sending the stock plummeting.
Will the SEC lift a finger to figure out how it was possible that such dramatic repricing on no news could happen? Of course not: as if by magic, the stock managed to re-levitate following its crash and most holders can pretend that just because there was another V-shaped recovery, what happened never actually happened.
Until one day, like Carl Icahn warned, the recovery part will never arrive. Then it will be too late to demand answers from the SEC.
In the meantime, remember what we said up front: increasingly more managers are piling into AAPL because it has the reputation of the "most liquid" stock in the market. Well, the "most liquid stock" just flash crashed.
Good luck to those holding the market's "illiquid" stocks in hopes they can sell first before everyone else, when the selling begins.
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We lost some folks
Physical gold does not do that. Paper gold might. *
* And because of the manipulations, I now hesitate to suggest others buy gold. It is manipulated. It might take longer than I expected for gold to become its real worth (much higher IMO).
So, do not buy gold unless you have a reasonable time horizon. Let me buy it instead.
The Notion of a flash crash is a teachable moment. And raycist
Efficient market theory. Youngsters might want to google it, but they were still lying to us about it in the 80's.
The selling begins in.......6 months, but what if you don't have 6 months? Flash crash bitches!*
Good way to explain what the valuations mean; that's going to leave a mark on somebodies 401K; tha t's gonna smart some, fer shure.
"Free markets".
/s
It (mostly) rebounded, so what's the lesson here for the retail investor? Don't set stops, even in "safe" and "liquid" names because any and every dip will be quickly bought and you will soon be made "whole." That way, when they finally decide it's time to pull the plug, there really will be no place for the sheeple to hide.
Stocks nearly always retest a spike low, something nasty is about to happen!
apple is WAY overpriced, needs to fall way low
Who cares? Move along.
Here's the thing, though...
Anyone who listened to ZH on Apple stock lost money.
I just don't get the Apple bashing, when there are so many juicier targets.
junk away, brethren.
I don't get it either, Jonny Horse. AAPL is one of the few stocks I own. They have great products, more cash than most small countries and they pay a dividend... good combination for a legitimate stock price.
I sold my lot today on the rebound. Bought them in their 2013 dip with euros as a €/$ and QE bet, which makes them over 100% in the +. Glad I did, because my miners are deep red. Apple singlehandedly saved my ass these last 1,5 years. Their amazing run just means people are taking profit. Still like the company and will have a good look again if there is a major correction. Compared to the other listed stocks Apple is actually a solid company.
The article does however make a valid point. If Apple can buckle this much under pressure, imagine what other stocks will do when people start rushing for the exit.
I think the problem is it's a company with 1 product in 10 different sizes. Apple has failed to innovate yet it enjoys sky high market cap.
18 pe vs 90 for Nflx
Yes, apple has been great, especially since they started using a real operating system (UNIX).
I think the comment is more to how skewed the "market" is. Shit, what does FB really produce?
Beware the oneth of December; ?. Nah, just doesn't scan.
It produces the ability of grandma to be able to watch over and manipulate the grandkids, hence since grandma has more money and wants to get her way, she donates large sums of money to keep the platform open and working. I know it's not much, but you did ask.
Hey, looky here at all 'em stop-losses banked up on AAPL. We oughta yank 'em down and suck 'em up. Load up on a few puts while you're at it. We'll blame yer fat finger.
and now for the $35 billion dollar question.. any idia what made apple flinch?
If you like your flash crash, you can keep your flash crash...
I thought Google was the most liquid. Well call me a sheep and just take my money why don't you.
We market capped some folks...
Apple/Braeburn Capital is a core Squid entity. It's a worthless piece of shit like its products, but it will never be allowed to die while the Fed exists. This never happened and to make sure this never happened, somebody is going to get nailgunned in the next few days, I reckon.
The SEC won't investigate this trivial matter, they have hard drives to fill up with santa porn.
Below is what the idiot analysts had to day, instead of "get the fuck out of this rigged market"
"What that is called is evaporation of liquidity, liquidity that was never there in the first place and it’s a typical maneuver that goes on in the fragmented stock market we have now," said Joseph Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
However, determining the cause of the decline wasn't so simple. “The fact is we don't yet know what caused the drop, and blaming it on HFT is misleading,” said Bill Harts, chief executive officer of Modern Markets Initiative, an advocate of high-speed electronic markets.
Nah, Carl I-Con was just tryin' to shake out the weak hands by playing who's-got-the-button with his billionaire boys' club. He pretended not to have it, then magically, and by several reports quite theatrically, produced it with a great flourish from behind his ear . . . as it snapped back, like Jane Russell's brassiere, to 116
Gees, sounds like it's time to bop.
https://www.youtube.com/watch?v=EAzm64zXNjk
The retail invester, that means YOU, will be vaporized almost instantly when the boyz decide to drop the market. There will be no time to sell because the circuit breakers will kick in within seconds. Sell today while you still can.
Wonder if Tim cook choked on his boy buddy when he saw this?
"Apples and bananas"
Does anyone here suspect that some OPTIONS BACKDATING has made a comeback in AAPL's ranks?