Apple Shares Soar 9% on News of Warren Buffett Stake in Company

Apple shares have soared 9 percent since American business magnate Warren Buffett revealed his company's $1.2 billion stake in the company on May 16 (via Fortune).

Apple stock looked to be on the wane following Apple's earnings call at the end of April, when the company announced its first ever drop in iPhone sales and its first year-over-year revenue drop in 13 years.

WARREN BUFFETT

Shares of Apple subsequently fell below $90 for the first time in nearly two years amid investors' concerns over the slump. Later it was revealed that Apple investor Carl Icahn had earlier decided to sell his stake in the company due to concern over China's attitude towards Apple, while a second Apple investor, David Tepper, had also dumped shares as its value continued to lessen.

However, just over two weeks ago, a regulatory filing by multinational conglomerate Berkshire Hathaway - which is run by Warren Buffett - revealed that as of March 31, the company owned 9,811,747 shares in Apple stock. Since then, shares of Apple have risen by 9 percent and breached the $100 mark, its highest point in a month.

Buffett has something of a reputation for being able to affect stocks, according to Fortune, which points to a dramatic 11 percent upturn of Kinder Morgan shares in February, shortly after Berkshire Hathaway disclosed its stake in the company.

However, Apple has also enjoyed a reversal of fortune in recently reported production targets for its next-generation iPhone 7, which is expected to launch this September.

Contradicting previous claims of projected weak demand for the upcoming device, Apple has reportedly asked its Asian suppliers to prepare for the highest iPhone production target in "about two years".

Apple investors also appeared unperturbed by news this week that the company's retail expansion in India may fall through, following a ruling from the Indian government that Apple must sell locally sourced goods if it wants to open stores in the country.

Apple remains eager to expand its business in India, where last quarter the company saw its revenue grow 56 percent, surpassing $1 billion. CEO Tim Cook's recent weeklong visit to the country garnered significant media attention and Apple will have regarded it as a positive step towards its global expansion goals.

Tag: Berkshire Hathaway

Top Rated Comments

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djcerla

48 months ago

There's always a very rational reason pushing retail investors to sell off their beloved stake in Apple.

But this reason is often completely fabricated. For example, it was very well known that Apple would have reported a non-record quarter and shares moved accordingly in the last months, pushing the stock to an unbelievable P/E of less than 9 (implying a loss of about 90% revenues in 10 years).

When the widely expected data was released, the stock moved sharply down, again, with doomsday stories and, guess what?, very well timed news about Icahn and other investors dropping the stock. The perfect storm.

As a consequence, retail investors panicked, igniting a downward spiral.

The stock is up 9% not because of Buffett, but because it was irrationally taken down by FUD created by speculators, the same people who are feasting today on mom & pop lost money.

Rating: 10 Votes

koolmagicguy

48 months ago

All Buffet has to do is buy some stock, tell people he has bought it, and when it skyrockets sell it off again. Rinse repeat. Genius.

Rating: 9 Votes

American Hero

48 months ago

Wow, so because one man owns millions of shares.... That must magically mean the price should go up now.

Makes total sense. I guess it's all about one person and not about the actual performance and potential of the company.

Rating: 3 Votes

KazKam

48 months ago

Apple Shares Soar 9% on News of Warren Buffett Stake in Company

Dear MacRumors, your logical fallacy is "false cause". https://yourlogicalfallacyis.com/false-cause

Not saying this didn't have some level of impact, but to call it THE reason is irrational.

Rating: 3 Votes

rti92391

48 months ago

('https://www.macrumors.com/2016/05/27/apple-shares-soar-news-warren-buffett-stake/')

Apple shares have soared 9 percent since American business magnate Warren Buffett revealed his company's $1.2 billion stake in the company on May 16 (via Fortune ('http://fortune.com/2016/05/26/shares-of-apple-have-soared-9-since-warren-buffett-revealed-his-stake/')).

Apple stock looked to be on the wane following Apple's earnings call at the end of April, when the company announced its first ever drop in iPhone sales ('https://www.macrumors.com/2016/04/26/q2-2016-earnings/') and its first year-over-year revenue drop in 13 years.

Shares of Apple subsequently fell below $90 for the first time in nearly two years amid investors' concerns over the slump. Later it was revealed that Apple investor Carl Icahn had earlier decided to sell his stake in the company ('https://www.macrumors.com/2016/04/28/carl-icahn-dumps-apple-shares/') due to concern over China's attitude towards Apple, while a second Apple investor, David Tepper, had also dumped shares ('https://www.macrumors.com/2016/05/14/investor-dumps-apple-stock-drops-two-year-low/') as its value continued to lessen.

However, just over two weeks ago, a regulatory filing by multinational conglomerate Berkshire Hathaway - which is run by Warren Buffett - revealed that as of March 31, the company owned 9,811,747 shares in Apple stock ('https://www.macrumors.com/2016/05/16/berkshire-hathaway-stake-in-apple/'). Since then, shares of Apple have risen by 9 percent and breached the $100 mark, its highest point in a month.

Buffett has something of a reputation for being able to effect stocks, according to Fortune, which points to a dramatic 11 percent upturn of Kinder Morgan shares in February, shortly after Berkshire Hathaway disclosed its stake in the company.

However, Apple has also enjoyed a reversal of fortune in recently reported production targets for its next-generation iPhone 7, which is expected to launch this September.

Contradicting previous claims of projected weak demand for the upcoming device, Apple has reportedly asked its Asian suppliers to prepare for the highest iPhone production target in "about two years" ('https://www.macrumors.com/2016/05/23/apple-suppliers-iphone-7-target-higher/').

Apple investors also appeared unperturbed by news this week that the company's retail expansion in India may fall through, following a ruling from the Indian government that Apple must sell locally sourced goods ('https://www.macrumors.com/2016/05/25/apple-retail-stores-in-india-waiver-denied/') if it wants to open stores in the country.

Apple remains eager to expand its business in India, where last quarter the company saw its revenue grow 56 percent, surpassing $1 billion. CEO Tim Cook's recent weeklong visit to the country garnered significant media attention and Apple will have regarded it as a positive step towards its global expansion goals.

Article Link: Apple Shares Soar 9% on News of Warren Buffett Stake in Company ('https://www.macrumors.com/2016/05/27/apple-shares-soar-news-warren-buffett-stake/')

This article is not correct. Buffett didn't have anything to do with the purchase (it was either Todd Combs or Ted Weschler). This is sloppy reporting. Apple is up due to more buyers than sellers, simple as that.

Rating: 2 Votes

gnasher729

48 months ago

It will reach $130 again within 28 days.

But someone posted it would reach $50 within a year?

Rating: 2 Votes

krazifour

48 months ago

9,811,747 shares is a very exact number.

Rating: 1 Votes

Dr.Chroma

48 months ago

Until the market crashes or some new bad news about that company appears before he sells. Then he loses big time. On paper.

But the deal is that AAPL has a low P/E compared to other companies in the same sector, and pays a dividend above 2%, which is exactly the type of deal into which a Dodd "value investor" looks to beat the market over a much longer time frame, well past short term market volatility and random up-and-down pricing noise.

Warren losing big time? Doubtful. One of the smartest and wealthiest investors in the world. I sold my shares last year and never looked back. It's to shaky of a market right now, unless you have the back up collateral to provide a buffer, in which case is why Icahn and Tepper moved on. In any case, Market Timer stated Apple Shares could tumble by $75.00 at the end of the Summer. Buy in at 89% and leave very little room for marginal error. Maybe even walk away with a healthy dividend.

This up and down fluctuation is to rattle the cages, nothing more. Well versed holders understand the market and hold on.

Rating: 1 Votes

dawson865

48 months ago

I guess no one understands each investors style / history... Some investors are traders, meaning they are in to make money in the short term - say months to perhaps a year or two. Buffett is a long, long, long term investor. His strategy is to buy a company he likes and hold it. Hold it for years and years and years. If you look at J&J (he made a fortune off the back of this investment) he just sat though any period the stock was down. He will just sit and sit and sit until it makes him money - it may boost confidence for the 10 year outlook but in the mean time Apple could be all over the place.

Rating: 1 Votes