Wednesday, December 27, 2006

As the Apple Turns - AAPL

Tonight's after-hours action in Apple Computer shares was nothing short of extraordinary following an almost unbelievable regular trading session. After rallying from a 5-percent early morning tumble to finish regular trading 1-cent higher, Apple pretty much drifted from 4 p.m. until 7:48 p.m. It was at that point that the fireworks re-erupted when the Financial Times moved a report concerning a huge stock options grant to AAPL CEO Steve Jobs in 2001 that was not authorized (or 'authorised' as the Brits spell it) by the company's board (Click Here). The report was eventually picked up by CNBC which sent AAPL down 3% during the final 12 minutes of after-hours trading in one of the more unusual bouts of late, late after-hours activity I've ever seen.... level 2 quotes went nuts.

We'll see how things shake out tomorrow morning. Call me loony, but I find it hard to believe that 3% can be melted off the bid on shares of a 69-BILLION dollar company literally in the final 12 minutes of late after-hours trading because some small timers unloaded their odd-lots of AAPL because they heard only half the story on CNBC about Jobs receiving the improper grant, but not surrendering them. Seeing that bid evaporate in real time was remarkable - not often seen since stocks are usually halted pending news - and fortunately 8 p.m. came along to stop everyone dead in their tracks until tomorrow morning. I'm willing to concede that only about $12 mln worth of volume was involved in the late selling spree, so if I'm wrong, I'm wrong - and after hours trading be damned if the market can be manipulated that sharply.
A number of analysts today defended the stock which leaves me wondering who's left for tomorrow morning, and tonight Drudge has the FT story emblazoned in red which may make for a rough go in the A.M.... I'm trying longs, but it's not looking good at this point.
As mentioned earlier in the week, I've been off to the sidelines amid the thin holiday volume in both futures and stock trades. With respect to Apple, the smartest thing would be to WAIT until the SEC filing is out this Friday - likely after the close on Friday (wouldn't it be fun if Apple surprised everyone with an earlier than expected filing?!). Until then, longs and shorts will be flying in a thick fog until that filing is out... an awful position to be in. No one knows for sure exactly what's going on - it's all a crap shoot until we get 'official' information. There will be plenty of time to jump in next week to either ride the stock back up if all of this is much ado about nothing, or ride the stock down further if we're looking at a protracted saga involving a formal SEC and Justice Department process.... or to simply pass. The FT's "sources", or assurances from Wall Street analysts just aren't enough for me.

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