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Why Is Apple Stock So Manipulated

Apple Inc.

I don’t get annoyed very easily. However, nothing gets under my craw more than hearing the word “manipulation” tossed around so recklessly whenever a stock does not perform as investors expect. It infuriates me. I hear this claim all the time from investors of low priced stocks such as Sirius XM, Sprint  and Citigroup before its reverse split last year. But now, it has escalated to a different level.

Stop the Double Standard

This week, no other stock has been more closely linked with the word “manipulation” than Apple. As an Apple shareholder myself, I can tell you that I have seen some “irregularities” on its stock chart. However, my aggravation is not due to the use of the word “manipulation” itself, but because of the constant double-standard that comes with it. It makes it hard to have an intelligent conversation.

It seems when it comes to Apple, the stock can only be “manipulated” in one direction – down. Cries to the SEC and demands for investigations only come when the stock is going the wrong way, never when the stock is going up. But how can that be?

On Wednesday, shares of Apple dropped over 6%, or essentially the company lost $35 billion of its value. There were considerable amount of speculation as to why that happened. And depending on who you ask, you will be given a host of answers. Some might be true, but others might be complete lunacy. Or there may be a combination.

However, investors should ask themselves what did we really know about Apple on Wednesday that we didn’t already know? Not a whole lot. At least I don’t recall any news coming from Tim Cook.  Instead, investors panicked and forgot why they invested in the company in the first place.

Nonetheless, it was funny to see that as the stock was being punished, investors of rival companies such as Research in Motion, Google and Microsoft were cheering Apple’s so-called demise. They think all of a sudden the company has lost its ability to innovate. Really? The company is only a week removed learning that it has just overtaken Google in U.S. smartphone market share. Let’s not get carried away.

It is hard to imagine that Apple would be on the receiving end of criticism from RIM – on innovation, no less. After all, RIM is still shedding government contracts left and right because its BlackBerries are perceived unreliable.  Think for a moment what an indictment that would be.

It is Manipulation or Paranoia?

Making matters worse what that several Apple longs started believing all of the noise and making a mockery of themselves on Twitter with claims of “manipulation” to anyone that would listen. Instead, the smart thing to do would be to have taken the drop as a buying opportunity rather than deceiving ourselves into thinking that the company was somehow really in trouble.

Does manipulation occur? Absolutely it does. But I will never accuse anyone of doing it. Sure, if one looks closely enough into any stock chart some “abnormalities” might stand out. But is it “manipulation” or paranoia? This is the question I’m beginning to wonder when certain investors who believe that Apple deserves special attention.

In other words, the company has become a victim of its own popularity. To say it more plainly, the SEC should start monitoring Apple’s trading for criminal activity. But why? I think as an Apple investor, this would hurt my chances of making money.

For instance, how quickly we forget that just a few weeks ago shares of Apple soared over 7% in one day. After closing on 11/16 at $527.68, the stock closed the very next session at $565.73, or a jump of $38. This happened on basically no news. Where were the cries for manipulation then?

Another example is that from the period of July 25 to September 21, shares of Apple soared 24% or $135 in just 42 trading sessions. That means the stock was up an average of $3.21 per day for 42 consecutive days. Do you know how impressive that is?

Even more remarkable was that it followed a Q3 earnings announcement that was pretty uninspiring. Again where were the cries for manipulation then? The stock saw a quick run-up to $705 and now it is taking a slight pause. Call it a correction if you like, but it is certainly not being manipulated. Call me naive, so what – I can’t have it both ways. It’s childish to think that I can.

Bottom Line

In the stock market, the word “manipulation” helps us explain something that we can’t understand. It’s also another way to deflect blame off ourselves and to someone else – this is even though we can’t prove it. However, I will argue that every stock on the market is manipulated. If you can’t agree to this, then none of them are.

It sounds very cliché to say, but “stocks go up and stocks go down.” Here’s another one, “if you can’t take the heat, get out of the kitchen.” And here’s my favorite,” if you can’t prove it, don’t say it.”

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  • appledandy appledandy 2 years ago

    Shorting causes Manipulation!

    The only thing wrong with Apple is the Options Market manipulated by unrelenting short selling. It is the favorite yo-yo of the Hedge funds and momentum traders. You can hammer it down $5 per share with quick intense shorting of a few hundred thousand shares. The stock is not being sold by shareholders except on stops. The naked short selling with puts at the bottom and calls at the top as they cover is done several times a day. Two things could stop it. An up-tick rule or splitting the stock 10 for 1. If the above described action netted a drop of 50 cents instead of $5, i think the manipulators would go find a new yo-yo.

  • Richard Saintvilus Richard Saintvilus, Contributor 2 years ago

    Then explain why it is not manipulation when the stock jumps $30 on no news?

  • mark mark 1 year ago

    manipulation = paranoia + sore losers

  • Ben Over Ben Over 2 years ago

    You ask about manipulation and you write for Forbes? That’s a good one!! Apple is manipulated to try and hold its current price. No one wants this dog, they want out, it is held at artificially high levels so that big money can get out. But when a large Fund sees how little innovation has gone on at Apple, they lose control and sell too quickly. Sure Apple is manipulated, when you want out, you have to try and get gullible investors to buy your stock.

  • Richard Saintvilus Richard Saintvilus, Contributor 2 years ago


    How is that any different from any other equity? Why is the intent enough to cry manipulation absent substantial proof?

  • Hey Ben… I find myself a bit skeptical with your position. I’m reasonably certain the stock goes up because someone buys it. But, when an analyst says the company should sell more units than the companies CFO does it becomes a short target. Thats a bummer. In any event, I’m thinking the new iPhone5 with its lighter weight, faster chipset, larger screen and other improvements reflects a fair measure of innovation. I also like the new iPad Mini. Then of course the much-improved iPad 4 is a pretty snappy piece of equipment that is beating the heck out of all comers and competition. Finally, I’m looking at Apple TV with a product road-map attached to taking media to a whole new level and direction (just watch). So… What company in Apple’s space do you see as more innovative and industry leading? I admit to being a very happy shareholder. But, I also just really like the products. I’ve tried other mobile devices and computers with an open-mind, and always go back to the Mac. – Cork

  • craighyork craighyork 2 years ago

    Agreed! The amount of capital required to actually manipulate a $500B market cap company is not realistic. Manipulation is a scapegoat term for folks on the wrong side of the trade. When someone says this to me, I tell them to take advantage, be proactive, buy and ride the coat tails of the manipulators to victory!

  • Richard Saintvilus Richard Saintvilus, Contributor 2 years ago

    Craig, it just doesn’t make sense to me. And I question the experience of those that can easily cry manipulation – in one direction only.

  • patrickc patrickc 2 years ago

    When stock moves in the stratospheric realms of $500 to $700 and when every man and his dog is buying the stock, you can expect wholesale manipulation both up and down. When herd mentality is at work you are always better to shop in safer waters for stock.

  • Richard Saintvilus Richard Saintvilus, Contributor 2 years ago

    Why is that not just standard “supply and demand” movement. Fear rallies and sell-offs occur all the time, it does not make it manipulation.