Apple shares will take up a lesser ratio of the Nasdaq-100 after stock exchange officials rebalance the index next month. Nasdaq recalibration lessens the load of Apple shares on the cumulative worth of the Nasdaq index by two quarters, which equals one half. The artificial impact of Apple rumors set in motion be hedge funds to impact the entire index with the weight of Apple shares is likely to decrease, while investors who may have avoided Apple stock due to its unpredictability and outrageous price could really own some of it. Post resource – Nasdaq rebalancing reduces hedge fund manipulation of Apple stock by MoneyBlogNewz.
Not letting Apple rule Nasdaq much longer
For the past few years, as Apple stock goes, so does the Nasdaq-100. Since the market bottomed out in 2009, the Mac, iPhone and iPad have driven Apple shares skyward more than 250 percent. Apple stock went up since then another 150 percent. That is more than 20 percent of the Nasdaq-100 total value. According to Nasdaq officials, Apple stock has ballooned to more than twice the weight it should have on the index. After Nasdaq rebalancing on May 2, Apple shares will account for a little more than 12 percent of the Nasdaq-100. The way the Nasdaq-100 needs to be calculated will make the correction for Apple stock. About 81 percent of corporations will be impacted by the change. The change might make Apple rivals go up. They will be more prevalent. There will be an increase from 3.4 percent to 8.3 percent for Microsoft. Oracle will rise to 6.7 percent, Google will rise to 5.8 percent, and Intel will climb to 4.2 percent.
How hedge funds manipulate the market with Apple rumors
A lower ratio for Apple shares on the Nasdaq-100 should shield the stock from future manipulation by hedge fund traders suspected of shorting Apple and spreading rumors that send the entire Nasdaq-100 down. Jason Schwartz at Seeking Alpha describes a recent instance in which unconfirmed conjecture about Apple based on vague sources subjected Apple stock to irrational price swings. Apple was trading at $360 in February. At this time, a rumor that iPad 2 releases would be delayed until June because of "supply chain contacts" came out by Yuanta Securities. Bloggers spread the rumor, and Yuanta Securities used it to aggressively short Apple shares. It only took two days to decrease Apple stock. It had a $20 decrease. There was then an announcement by Steve Jobs. He said that March 10 the iPad would go on sale. Yuanta made lots of money off of it although investors felt really idiotic. This had a huge impact on the Nasdaq-100. It was a large deal.
No more of an Apple rumor influence
Money managers are started to redo the money they have even though the Nasdaq rebalancing won't happen for another month. A drop occurred on Tues in Apple stock during this. It caused a $4.19 decrease from $337 to $341.19. Manipulating the market with Apple will no longer happen. It has already stopped. Analysts do not expect the latest iPhone delay rumors (which would freeze the iPhone industry and hurt Apple if they were true) to work because Apple stock remains about $15 below its high and is trending upward again. Apple shares will be traded quite a bit. More than likely, the business will show in its first quarter earnings that it did very well.
Citations
Fortune
tech.fortune.cnn.com/2011/04/05/a-good-day-to-buy-aapl/
Mac Observer
macobserver.com/tmo/article/nasdaq-100_to_cut_apples_index_share_nearly_in_half/
MSN Money
money.msn.com/market-news/default.aspx?feat=e52a3c86-3053-48e5-91eb-970765febdcc
Seeking Alpha
seekingalpha.com/article/260887-hedge-funds-bloggers-and-the-origin-of-apple-rumors
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