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'Premeditated Flash Dump' of Apple Shares Behind Friday's Last-Second Slump, Says Trader

A blog entry at Zero Hedge suggests that a deliberate share dump in the final second of trading may have been partly responsible for yet another drop in Apple's share price on Friday.


Zero Hedge cites several Nanex charts as evidence, observing that some 800,000 shares worth $350 million were traded in the final seconds of trading on Friday.
Unlike traditional flash crashes where the trade is an HFT [high-frequency trading] error, or a few shares traded through the entire bid or offer stack, in this case it looks like a very premeditated unloading of some 800K shares (some $350 million worth) of AAPL in the last second, with the full knowledge it [would] shake the market.
The move brought Apple's stock price down by approximately $5 in the waning seconds of the week's trading, where it sat throughout much of the after-hours trading period leading into the reopening of regular trading this morning. Apple's stock is down another $3.50 as trading opens today.

Top Rated Comments

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16 months ago
Didn't Apple already dump Flash?
Rating: 29 Positives
16 months ago
Apple is just Wall Street's latest cash cow. Here is how it works:

Big institutional investors get together in back rooms and choose companies they know are really solid and have profit in their future. They set irrationally high quarterly numbers or claim a company "did not exceed expectations by enough". They start a plunge by selling short a large block of shares to create panic. Then other companies and individuals panic (predictably) and dump their shares thinking the sky is falling. The share price plunges.

When the damage has been done and a share price has been devalued 20-30%, the big investors start buying back those shares. Momentum builds and drives the price back where it was and they make billions as the price rises, more than offsetting the short sell they used to start this march of the lemmings.

I watched Wall St do this to GE at 8 month intervals in the late 80's, working a 10 point drop then rise. GE killed this with repurchase programs but the same thing has happened to HP and Microsoft and other companies. It is extremely predictable once it starts but only the fat cats make the real money, basically by defrauding smaller investors by making them panic.
Rating: 17 Positives
16 months ago
This move is called shorting the stock. get owners scared, sell. Once the price gets to a designated spot, start buying again. Its extremely risky, but making making money on loss, priceless. Apple's stock is going to continue to fall to cover the gap. Apple could go bellow 400.00 by February. Apple is in trouble if it doesn not fix it this year. Apple can easily retake the market with a revampt IOS 7, iPhone, iPad and a new "special product."
Rating: 14 Positives
16 months ago
Some people need to do some research on High Frequency Trading. This isn't some investor, this is a huge faceless corporation purposefully trying to tank Apple's stock. Just wait. I've got a $1 that says Google is behind this.
Rating: 9 Positives
16 months ago

This move is called shorting the stock.


I up-voted your comment - not because I liked it, but because you nailed it.
Many people don't realize the type of "artificial" manipulation of the market that shareholders can weild.

I heard again on the news today about how Apple stock tanked last week because they fell short of analyst's predicted earnings - albeit with another record-breaking quarter?
Rating: 9 Positives
16 months ago
It sure is time that this high frequency trading is somewhat regulated on a global level. After the 2008 crash, the banks are back up on top gambling with our money again, while average people are still suffering from the crisis. This sort of stock trading has nothing to do with evaluating the value of a company or its chances to prevail, it is simply playing odds of quickly shifting very large amounts of money forth and back.
Rating: 7 Positives
16 months ago

Shorts are considered sales for calculating volume?


When an investor goes long on an investment, it means that he or she has bought a stock believing its price will rise in the future. Conversely, when an investor goes short, he or she is anticipating a decrease in share price.

Short selling is the selling of a stock that the seller doesn't own. More specifically, a short sale is the sale of a security that isn't owned by the seller, but that is promised to be delivered. That may sound confusing, but it's actually a simple concept.

when you short sell a stock, your broker will lend it to you. The stock will come from the brokerage's own inventory, from another one of the firm's customers, or from another brokerage firm. The shares are sold and the proceeds are credited to your account. Sooner or later, you must "close" the short by buying back the same number of shares (called covering) and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. If the price of the stock rises, you have to buy it back at the higher price, and you lose money.
Rating: 6 Positives
16 months ago
I always find it amazing how easy it seems to be able to manipulate stock or even economies by talking them down. "Not innovating", "running out of ideas" - and so called analysts overestimating, so that even with record profits and new products (iPad Mini for example), they still manage to shake investors.

Still, can you imagine having bought APPL in 1996 and then selling in 2011?!
Rating: 5 Positives
16 months ago
What Apple needs to do is arrange for some horse's heads to appear in the beds of some Wall Street executives.
Rating: 4 Positives
16 months ago
I saw this happen live on my AAPL chart last Friday and now I know the reason behind it. It didn't last for more than a couple of seconds where the price dropped ~$4.50/share then quickly climbed back.

Yes people, these things are easily manipulated by the big guys to make lots of money off much smaller investors.

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I'll buy some more Apple stock once it falls below $400. Shouldn't be too long now.



You'll be waiting longer than you thought as AAPL is back above $450 at the moment.
Rating: 4 Positives

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