Apple stock slide blamed on large hedge fund sales
updated 05:10 pm EST, Thu February 14, 2013
Some firms completely divested of Apple stock
Apple's deep stock slide during 2012 was linked to massive unloading by several hedge funds, according to documents filed with the US Securities and Exchange Commission, discovered by Reuters. Omega Advisors, for instance, sold all of its 266,000 Apple shares during the fourth quarter of 2012. Eton Park Capital Management sold the entirety of its 600,000 shares in a period spanning the third and fourth quarters. Jana Partners dumped its full 143,000 shares, while Farallon Capital sold off 137,000.
It's not clear what prompted the sell-offs, but they may have been triggered by worries about more aggressive competition, lower profit margins, and corporate shakeups. Apple stock also surged quickly in the first half of 2012, which may have prompted funds to divest for the sake of a temporary windfall and the ability to buy back in later at a cheaper price.
Some partial unloading was done by Coatue Management, which dropped 18 percent of its shares, and Tiger Global Management, which got rid of 19 percent. Coatue ended up with 643,000 shares at the end of 2012, whereas Tiger Global had a little over 1 million. A separate company, Tiger Management, cut holdings by 28 percent to 42,000.
Fresh-Faced Recruit
Joined: 01-07-05
Use your brain, people....
The unloading was entirely based on the regular cycle of taking profit - accelerated by the concern over increased capital gains taxes this year, which would have made the same profit much costlier. Instead, these funds dumped their holdings last year, took profits, paid lower taxes, and will most certainly pick up AAPL this year at the reduced rates, riding it to further increases throughout the year - and subsequently still paying lower taxes, as their capital aims would be less.
It's not rocket science. Pseudo speculations over competition, margins and shakeups are just more FUD.