The Unexpected (and Silly) Reason Apple Soared Above $500

Let's get one thing clear: Sometimes the market acts ridiculously.

Apple (NASDAQ: AAPL  ) has been a dud for investors over the past year. It seemed that nothing could move shares higher -- not share repurchases, record quarters, or strong free cash flow growth -- that is, until a few choice tweets sent shares rocketing.

Famed investor Carl Icahn lit the match with two tweets regarding his "large" position in the company. The herd mentality seemed to have been in full force, as shares quickly rose above $500 a share, prices not seen since the beginning of the year. 

While Icahn may get all the credit, the changes he's calling for are already in motion. Furthermore, while he may have influence over the investing mob's perception of Apple, his position is relatively small when stacked against the company's $450 billion market cap. 

Sometimes it's important to take a step back and see the forest from the trees, as the Fool's Austin Smith reminds us in the following video.

If you'd rather take the long view and not get riled up by a few tweets here and there, dividend stocks are for you.

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Read/Post Comments (5) | Recommend This Article (7)

Comments from our Foolish Readers

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  • Report this Comment On August 17, 2013, at 11:34 AM, Options2Wealth wrote:

    I beg to differ...

    On July 26, I wrote a blog post in which I pointed out that Apple's stock broke through a very significant technical resistance on its Point and Figure chart: the Bearish Resistance Line. In a very detailed post, I wrote that this technical resistance break was MAJOR and I ended my blog post by stating, "This impending move in Apple should be explosive, and the ride, pure doozy...I am counting on it!"

    Apple was going to break $500 whether or not Icahn tweeted that he was buying Apple...

    Carl Icahn has the money to hire the best technical analysts and I believe that his decision to move into Apple stock had something to do with this VERY IMPORTANT technical signal...AAPL's break of its Bearish Resistance Line...

    You should be able to find my blog by Googling my handle, Options2Wealth...Lest you may think that I am commenting to your post in order to solicit visitors to my blog so that I can make money, I should make it clear that my blog is 100% free with no ads, no registrations, no nothing...LOL!

    kp

  • Report this Comment On August 17, 2013, at 11:42 AM, MrSmith210 wrote:

    Apple was up 15% off its lows and rising daily before Icahn said anything. His tweet pushed it maybe 7% more last week. Yawn. The stock was on the move and gaining traction well before Carl said anything.

    But what's so silly? Anytime Icahn lets it be known he's in a stock (CHK, HLF, NFLX, DELL, etc) they pop and run hard. Why should AAPL be an exception? All it boils down to is people respect his investments as they're usually VERY profitable so retail AND hedge funds follow his lead when he speaks. Much like when Buffett makes a play. So to claim apples recent move was "silly" or "ridiculous" is just that... Silly and ridiculous. People respect billionaires who make money in the market and like to follow their leads. This is nothing new.

  • Report this Comment On August 17, 2013, at 12:26 PM, croccodilemile wrote:

    Totally agree KP.

    I was long just before earnings on technical strength and added to the position after the bull flag breakout 7 days ago.

    I speculate Icahn and his team saw the glaring technical bullishness and the changing sentiment and simply helped turn what was going to happen in 5 days into a one day move.

  • Report this Comment On August 17, 2013, at 1:04 PM, cazic99 wrote:

    Why is it silly? Apple has a pristine balance sheet, more cash than anyone, low PE, desired products, high dividend, huge buy back program. The only person silly is the author of this article.

  • Report this Comment On August 17, 2013, at 3:44 PM, dhuddle wrote:

    I think the reason the price jumped is because of Icahn's reputation. He has had an amazing 2 years and has been right 90% of the time.

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