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Rotten rumors of impossible Apple stock split helps fund manager clear profits

post #1 of 70
Thread Starter 
Apple shares reversed intraday losses and gained slightly after hedge fund manager Doug Kass tweeted a rumor of Apple announcing a stock split at tomorrow's shareholder meeting. However, Kass subsequently sold on the run up and then disavowed the rumor as impossible and unlikely to actually happen.

February 26, 2013


Kass' tweet of "hearing a rumor that Apple will announce a stock split at tomorrow's shareholder meeting" appeared to turn around losses the stock had incurred earlier in the day, followed by shares rising just over 1 percent afterward. Apple's shares ended the day at $448.97, up just under 1.4 percent for the day.

AAPL Feb 26 2013


However, after being credited with the change in prices, Kass subsequently responded by saying, "If you think one person can move Apple on a rumor you are in the wrong business."

Kass then announced via Twitter that due to the rise in Apple's stock, "Prudence dictates that I sell off some of this outsized position." He later announced he was "paring back" his Apple holdings because "the company would require a shareholder vote to split the stock."

He added, "the [stock split] rumor seems to be baseless based on current share authorization," as Apple's articles of incorporation only allow a 2-1 stock split. "Which is no big deal," he added, "[Apple] must seek auth. for more." Kass meant that for Apple to split shares greater than 2-1, it would have to gain authorization through a vote by shareholders.

Say it, swing it, profit



The Street staff


Kass (second from left) also writes for The Street, founded by Jim Cramer (second from right). Six years ago, Cramer outlined how hedge fund managers spew false information to create either panic and excitement that could be used to drive stock prices up or down, allowing for easy profits for stock manipulators who can effectively seed false information.

"You can?t foment,? Cramer said in a video interview appearing on The Street website. ?That?s a violation. You can?t create yourself an impression that a stock is down. But you do it anyway because the SEC doesn?t understand it. That?s the only sense that I would say that it is illegal. But a hedge fund that is not up a lot really has to do a lot now to save itself."This is actually blatantly illegal, but when you have six days and your company may be in doubt because you are down, I think it is really important to foment."

"This is actually blatantly illegal,? he added, ?but when you have six days and your company may be in doubt because you are down, I think it is really important to foment. If I were one of these guys, foment an impression that Research In Motion isn?t any good, because Research In Motion is the key today," he said, speaking in 2007.

?It might cost me $15 to $20 million to knock RIM down, but it would be fabulous because it would beleaguer all the moron longs [investing in RIM?s success].? After creating a loss by fomenting a false outlook with bad news, manipulators can then take advantage of their own downswing in share price and profit.

?It?s important to get people talking about it as if something is wrong with RIM. Then you would call the [Wall Street] Journal and talk the bozo reporter on Research in Motion and you would feed that Palm has got a killer it is going to give. These are the things that you must do on a day like today. And if you are not doing it, maybe you shouldn?t be in the game.?

Cramer next discussed how Apple was "an ideal short" because hedge fund managers know when they lie about Apple, "the people who write about Apple want that story. And you can claim that it is credible because you spoke to someone at Apple, because Apple isn?t in [a position to comment on unannounced products]."

"What?s important when you?re in that hedge fund mode is to not do anything remotely truthful."Cramer added, ?What?s important when you?re in that hedge fund mode is to not do anything remotely truthful. Because the truth is so against your view that it?s important to create a new truth, to develop a fiction. The fiction is developed by almost anybody who is down by 2% or up 6%. You can?t take any chances, you can?t have the market up any more than it is if you?re up 6.?

Asked by his interviewer about the fundamentals of the market (the actual performance of companies) compared to the mechanics of the market (the artificial actions taken by traders in a game of buying and selling shares), Cramer dismissed the idea saying, ?The mechanics are much more important than fundamentals."The great thing about the market is that it has nothing to do with the actual stocks. Maybe two weeks from now the buyers will come to their senses and realize that everything they heard was a lie."

"Who cares about the fundamentals?" Cramer asked. "Research in Motion just blew out the quarter. But look what people can do. That?s a fabulous thing. The great thing about the market is that it has nothing to do with the actual stocks. Maybe two weeks from now the buyers will come to their senses and realize that everything they heard was a lie."

Cramer then concluded, "I think it?s important for people to realize that the way that the market really works is to have that nexus of: hit the brokerage houses with a series of orders that can push it down, the leak it to the press, and then get it on CNBC; that?s also very important. And then you?ll have a vicious cycle down. It?s a pretty good game. It can be played for a percent or two."

Share splits back on the table at Apple?



While much of the conversation in anticipation of Apple's shareholder meeting scheduled for tomorrow morning has centered upon a proposal by Greenlight Capital's David Einhorn to issue preferred stock tied to increased dividends, the chatter about stock splits reignited a subject that's been in discussion for some time.

Unlike dividends, which would distribute a fixed portion of Apple's cash to shareholders over time, a stock split wouldn't do anything to directly increase the value of holding Apple shares. However, some observers have hoped a share split would make owning Apple shares easier for smaller investors.

A stock split, which would simply divide each existing share in half (or into some other set fraction) is seen as potentially making the shares seem more affordable or simply dispel irrational feelings that the current share price is "too high."

Apple last issued a 2 for 1 share split on February 28, 2005; it announced similar splits in the summer of 2000 and the summer of 1987.

At last year's shareholder meeting, members of Apple's executive team said they had discussed a stock split along with dividend plans and a share buyback program. The company subsequently announced a 4 year dividend and buyback plan, but did not announce any plans to split shares.

Chief executive Tim Cook noted that one downside to splitting shares is that it could increase fees paid by some parties to execute trades. Overall, however, any effects would largely be symbolic rather than having any real impact on the value of Apple's shares.

At the same time, the idea promoting a share split is that it would induce a new wave of buyers, hopefully propelling the share price upward. After hitting highs above $700 last fall, Apple's shares have tumbled down into the low end of the $400 range, essentially vaporizing all the gains Apple earned since late 2011.

This occured despite 2012 being the company's most productive and profitable year, generating record new revenues and earnings. Apple now takes in the most profits of any personal computer maker, earns the vast majority of the profits of the entire mobile industry, and accounted for the largest segment (one fifth) of consumer electronics in the US.
post #2 of 70

Whew...what is his trip? He should be investigated by the SEC...

post #3 of 70
Let the anti-Wall Street whining begin. It's all a game folks, either learn to play or get played. Your choice. It has nothing to do with Apple or any other specific company.
post #4 of 70
Doesn't really pay to invest in the share market for the average investor, does it?
post #5 of 70
This is why the world is in such a mess. All the blatant false information and stock market manipulation. Is lying and cheating the only way people can succeed? The reason Apple keeps its money is so it doesn't have to rely on the idiots in the stock market causing it to go bankrupt. I'd empty the prisons on murderers and put in people like Cramer and Kass. Their actions affect more people in a negative manner than murders and common thieves do.
post #6 of 70

DIsgusting. And scum like this guy won't see a shred of accountability for their dishonest, damaging actions. It's only everyone else that gets fucked. 

post #7 of 70
Quote:
Originally Posted by tfun50 View Post

...what is his trip?

 

He is a professional lying scumbag. No ethics, no remorse.

post #8 of 70
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #9 of 70
@msuberly,

Your blithe defense of this kind of purely self-serving (and likely illegal) wall st. behavior makes me wonder if you are either an idiot or a wall st. sycophant (or both).

Although I think it's possible you're just the kind of "persona" that money can buy:
http://www.dailykos.com/story/2011/02/16/945768/-UPDATED-The-HB-Gary-Email-That-Should-Concern-Us-All
post #10 of 70
That guy needs to be in jail. I hope the SEC goes after him.

Meanwhile, Apple could just announce a 2:1 split tomorrow and tell people that they're going to request a greater split in the next shareholder meeting.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #11 of 70

What a bunch of BS. Certain people belong in jail, where it's not easy to access twitter.

 

"If you think one person can move Apple on a rumor you are in the wrong business."

 

I actually do think that one person or one idiotic rumor can move Apple. The way it goes is that a dumb rumor gets invented and fabricated by a single source, and then you have every single Apple related site and various news sites on the internet spreading that very same rumor. And it doesn't even matter if it's true or not, the BS spreads like wildfire and apparently, a lot of stupid people believe it. All of the Apple related sites basically report the same news and BS rumors.

 

How many different sites have written about this Kass rumor today? A lot, that's how many.

 

And why would he have typed that first rumor, if later on, he dismisses it and says that it's pretty much impossible?

post #12 of 70
Quote:

Originally Posted by AppleInsider View Post

Apple shares reversed intraday losses and gained slightly after hedge fund manager Doug Kass tweeted a rumor of Apple announcing a stock split at tomorrow's shareholder meeting. However, Kass subsequently sold on the run up and then disavowed the rumor as impossible and unlikely to actually happen.

...

 

 

And yet he's not in jail.  

 

And Jim Cramer his old boss has been doing this for years and he is also not in jail.  

 

Clear cut stock manipulation ... nothing happens.  

And you people wonder why no one trusts the USA anymore.  

post #13 of 70

I am surprised such scum like him is not put away! 

 

It is even disgusting to read that Cramer mentioning that he doesn't believe in fundamentals. He was the one at one point pumping APPL and when things go south he starts speaking a different language! I think most of the guys on CNBC and The Street and liars, cheaters and with out ethics - They are just a notch above scumbags!

post #14 of 70
Based only on his diatribe about lies, deceits and "fomenting", this guy needs more than a slap on the wrist. He's actually advocating the kind of dishonesty the SEC is there to regulate against and prevent, AND then acting accordingly.

This was a blatant, almost perverse manipulation. Someone credible gives the sense that he has an inside "little bird told me" scoop, and he KNOWS it most certainly will influence the price movement%u2026 and then sells on the uptick? Blatant.

I also think this could be a bit of 'testing the waters'. If the SEC does nothing at all, watch for a lot more of it. Especially coming from this guy if he isn't fined or censured for this despicable little "foment" of his...
post #15 of 70
Quote:
Originally Posted by broadbean View Post

Doesn't really pay to invest in the share market for the average investor, does it?


It does pay to invest  if you are a contrarian investor and take advantage of the misinformation in the press.  1wink.gif

post #16 of 70
Quote:
Originally Posted by jragosta View Post

That guy needs to be in jail. I hope the SEC goes after him.

Meanwhile, Apple could just announce a 2:1 split tomorrow and tell people that they're going to request a greater split in the next shareholder meeting.

Or Apple could just announce 2:1 splits for several quarters in a row.

post #17 of 70

A stock split doesn't do anything to the value of your holding at the moment it occurs, but wouldn't it have a multiplicative effect on the gains (or losses) based on the factor of the split?  If AAPL were to effect a 2-for-1, and the stock went up five points the next day, you just doubled the gains you'd have seen without the split, correct?  And would it be right to speculate that the trading day after a split goes into effect would see a big jump in the price of a stock like AAPL?

post #18 of 70

Doug Kass - notorious manipulator, shameless liar, best ignored - oft seen bashing Steve Jobs for one thing or another back in the day.

post #19 of 70
Quote:
Originally Posted by r00fus View Post

@msuberly,

Your blithe defense of this kind of purely self-serving (and likely illegal) wall st. behavior makes me wonder if you are either an idiot or a wall st. sycophant (or both).

Although I think it's possible you're just the kind of "persona" that money can buy:
http://www.dailykos.com/story/2011/02/16/945768/-UPDATED-The-HB-Gary-Email-That-Should-Concern-Us-All
 

 

I read the linked article. Holy crap, man…. there's something that should simply be illegal. Automated mass manipulation of online social environments for political/financial gain? It takes the concept of propaganda to a whole new level...

 

I can understand creating personas for intelligence gathering, for security… that makes sense. But like drones, their use must be limited and highly contextual… this becomes a free for all, highly exploitable, and unless it's regulated, too easy to blur the lines of ethical and even criminal behavior...

 

Thanks for the link though, and I agree, @msuberly contrariness could indeed speak to one of those faux personas...

post #20 of 70
Quote:
Originally Posted by tfun50 View Post

Whew...what is his trip? He should be investigated by the SEC...

 

Or at least his bosses cause that looked like a rather clear attempt to pump up the price and then short it. Both of which are money making moves.

 

even if he's cleared legally it doesn't make him look so good and reputation can be just as damaging

post #21 of 70
Quote:
Originally Posted by JollyPaul View Post

He is a professional lying scumbag. No ethics, no remorse.

I second that. I have seen him say something and trade the opposite so many times, he is a stock manipulator.
post #22 of 70
Interesting that he claims on twitter he's just repeating rumors that have been going around for days.

And yet not one Apple blog got wind of these rumors until he said it?
post #23 of 70

This has to be illegal. Besides any investor buying high in expectation of a split failed to understand that Apple said it will buy back stock.

post #24 of 70
Quote:
Originally Posted by Creep View Post

A stock split doesn't do anything to the value of your holding at the moment it occurs, but wouldn't it have a multiplicative effect on the gains (or losses) based on the factor of the split?  If AAPL were to effect a 2-for-1, and the stock went up five points the next day, you just doubled the gains you'd have seen without the split, correct?  And would it be right to speculate that the trading day after a split goes into effect would see a big jump in the price of a stock like AAPL?

How does that work?

 

Let's say you have one share of a stock at $400, and tomorrow it goes up $100 for some reason. If the stock had split and you suddenly have 2 shares valued at $200 apiece, under the exact same conditions as the unsplit stock, there's no reason each half-priced share would also go up $100 each, more like half that — so $50 each. It's the same value.

 

If you buy $10,000 of stock in AAPL and share value increases by 5% the next day, you still have $10,500 regardless of what number of shares make up that original $10,000. It's not like having double the number of shares doubles the increase in value.

post #25 of 70

Apple is one of the most innovative and profitable companies on the planet, developing and delivering products that people clearly want to buy.  Yet Apple seems especially vulnerable to any comment from Wall Street "analysts" resulting in unusual effects on AAPL value - is this just random?

 

I'm not a conspiracy theorist, but it really is a good question.  Does the SEC look at this sort of comment by supposedly worthwhile pundits for their possible stock manipulation potential?  Whatever happened to the "StockWatch" concept in the "Wall Street" movie where "someone" was looking at wild trade deviations as evidence of potential wrong-doing?

post #26 of 70
Throw them in federal prison for the next 10 years. Freeze all their assets and sell it off.
post #27 of 70
Quote:
Originally Posted by fastasleep View Post

If you buy $10,000 of stock in AAPL and share value increases by 5% the next day, you still have $10,500 regardless of what number of shares make up that original $10,000. It's not like having double the number of shares doubles the increase in value.

 

Yep. A 5% gain is still a 5% gain. If you're holding 100 shares of AAPL, or 500 shares of AAPL post 5:1 split, then it would not make any difference, as far as I understand.

 

Some people think that AAPL is too expensive, but they couldn't be more wrong of course. Some people are scared of a share price that's in the hundreds of dollars. Maybe for somebody who only has $1,000 to invest, then AAPL might look expensive, since they can buy no more than 2 shares, but if somebody has that little to invest, then they are just wasting their time anyway. AAPL is extremely cheap, especially at the moment.

post #28 of 70
you can file a complaint, anonymous or otherwise, with the sec at https://denebleo.sec.gov/TCRExternal/questionaire.xhtml
post #29 of 70

I think splitting the stock would be a positive thing at this moment in time. Apple is pretty damn cheap here, but retail investors see any stock over $150 or so as expensive, whatever the fundamentals. Of course, I don't think splitting the stock is the only thing Apple should do. They should buy back shares, increase their dividend, and most importantly, keep producing the best products on the planet. A new, surprisingly cool new product, would also be welcome. 

 

The bottom line is, Apple really needs to go on the offense and start making Apple investors feel optimistic again. 

 

:)

post #30 of 70
Do a bunch of sequential splits 2 for 1 splits
post #31 of 70

How about this rumor - Steve Job came from the dead and he is going to kick some Analyst and Hedge Fund Managers butt!

post #32 of 70
Quote:
Originally Posted by "Apple 
[" url="/t/156189/rotten-rumors-of-impossible-apple-stock-split-helps-fund-manager-clear-profits#post_2284480"]
Yep. A 5% gain is still a 5% gain. If you're holding 100 shares of AAPL, or 500 shares of AAPL post 5:1 split, then it would not make any difference, as far as I understand.

Some people think that AAPL is too expensive, but they couldn't be more wrong of course. Some people are scared of a share price that's in the hundreds of dollars. Maybe for somebody who only has $1,000 to invest, then AAPL might look expensive, since they can buy no more than 2 shares, but if somebody has that little to invest, then they are just wasting their time anyway. AAPL is extremely cheap, especially at the moment.

A stock split makes a lot of sense. "Those people shouldn't invest in Apple" is an incredibly ridiculous (not to mention elitist and arrogant) attitude. And it's not just the people who only have $1,000 to invest who get priced out of AAPL. What about the person who wants to set aside $300 per month to buy shares regularly (income averaging). Can't do it with a stock that's $500.

There's another factor that often gets ignored. Something like 70% of AAPL is owned by institutions - just the type of investors who are quick to buy or sell. Each time another of these silly rumors pops up, the stock gets hammered because of the speed at which institutional investors pull the trigger. Individual investors are more likely to take their time - so Apple should be encouraging individual ownership. A 10:1 split (or a series of 2:1 splits) would do that.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
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post #33 of 70
There is almost a billion of Apple shares in circulation. Splitting it would mean that there is to many shares driving the price down.

I hate these short time investors that want Apple to pay dividend/buy back shares. Look what it have got Apple today. Just look at 1985 and history how it almost killed Apple. Instead of one dividend, Apple could buy/build a foundry and make its own chips. A must in a world where Samsung have lower costs since they produce all their own stuff. Outsourcing is always more expensive since a third party needs to make a profit...

The only idiotic thing I would like to see Apple do is to buy MSFT and dissolve the company. Sure.. Blowing away 200 billions.. But its for the good of the world. Then start saving to buy Google/Samsung and dissolve them = we would have peace and prosperity in the world.
post #34 of 70

Heavens forbid that someone other than AI would try to influence Apple stock prices.

post #35 of 70
Quote:
Originally Posted by jragosta View Post


A stock split makes a lot of sense. "Those people shouldn't invest in Apple" is an incredibly ridiculous (not to mention elitist and arrogant) attitude. And it's not just the people who only have $1,000 to invest who get priced out of AAPL. What about the person who wants to set aside $300 per month to buy shares regularly (income averaging). Can't do it with a stock that's $500.

There's another factor that often gets ignored. Something like 70% of AAPL is owned by institutions - just the type of investors who are quick to buy or sell. Each time another of these silly rumors pops up, the stock gets hammered because of the speed at which institutional investors pull the trigger. Individual investors are more likely to take their time - so Apple should be encouraging individual ownership. A 10:1 split (or a series of 2:1 splits) would do that.

I'm not claiming that a stock split is bad. I do believe that Apple has had a few splits in the past before I ever owned AAPL, but I do not know what effect a current split would have, if any at all. I'm not against it, it might be a good thing. It would be great if Apple decides to split, the sentiment begins to change and AAPL begins climbing again. Nope, I'm not against that.

 

As for the $1,000 amount to invest, it wasn't really about AAPL specifically, but more about stocks in general. It just seems like a tiny amount, and even with a 10% gain for the year, that's only $100 profit, and even less than that after expenses of course. If I only had $1,000 to invest, I think that it would give me greater satisfaction to just blow it on something.

post #36 of 70
Quote:
Originally Posted by CraigE View Post

Heavens forbid that someone other than AI would try to influence Apple stock prices.

 

What fucking effect do you think this blog has on Apple's stock? Here's a hint: Absolutely zero. 

 

Your comment is what happens when trolls like you hate Apple so viciously- you condone lies, deceit, and stock manipulation which is done to make a quick buck and **** over the stock even further. Just because you hate Apple and love anything that sees them damaged, no matter how underhanded. Disgusting. Do us a favor and make this your one and only post on this forum. Go discuss things you actually enjoy. 


Edited by Slurpy - 2/26/13 at 7:55pm
post #37 of 70
This is why gnomes AND kobolds should NOT be allowed to participate in the financial markets.
post #38 of 70

And hedge fund managers get big tax breaks from the IRS. Right now Republicans won't even talk about closing those loopholes, because they'd rather cut your mother's social security than make hedge fund managers pay fair taxes.

post #39 of 70
Quote:
Originally Posted by "Apple 
[" url="/t/156189/rotten-rumors-of-impossible-apple-stock-split-helps-fund-manager-clear-profits#post_2284532"]I'm not claiming that a stock split is bad. I do believe that Apple has had a few splits in the past before I ever owned AAPL, but I do not know what effect a current split would have, if any at all. I'm not against it, it might be a good thing. It would be great if Apple decides to split, the sentiment begins to change and AAPL begins climbing again. Nope, I'm not against that.

As for the $1,000 amount to invest, it wasn't really about AAPL specifically, but more about stocks in general. It just seems like a tiny amount, and even with a 10% gain for the year, that's only $100 profit, and even less than that after expenses of course. If I only had $1,000 to invest, I think that it would give me greater satisfaction to just blow it on something.

Fortunately, some people are smarter than that.

I started my stepdaughter's IRA when she was 18. The first few years, she put about 10% of her income into the account and it was only a few hundred dollars a year. Now that she's approaching 30, she has a nice start on her retirement - which will only continue to grow.

Particularly for the young (who have 40+ years for their investment to compound), even small investments go a long way toward ensuring a comfortable retirement.
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"I'm way over my head when it comes to technical issues like this"
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post #40 of 70
Quote:
Originally Posted by jragosta View Post


Fortunately, some people are smarter than that.

I started my stepdaughter's IRA when she was 18. The first few years, she put about 10% of her income into the account and it was only a few hundred dollars a year. Now that she's approaching 30, she has a nice start on her retirement - which will only continue to grow.

Particularly for the young (who have 40+ years for their investment to compound), even small investments go a long way toward ensuring a comfortable retirement.

 

If somebody starts very young, and has tons of time for the investment to compound, then I agree, that it would be a smart idea.

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