Hedge Funder Lee Cooperman Takes 'Modest Position' in Apple, Drives Stock Price Over $500

[TallManNY]

As I said in the other recent topic here:

"Stock price and market manipulation at it's finest?"

And I think spending this much in one company and bragging about it is fishy. As most smart people would have a diversified share portfolio to spread the risk. Either they are trying to manipulate the market or they have insider information.

No. If you are an investor you want customers to give you money to invest because you beat the market. You can't have a diversified portfolio and still get larger than market level returns.

This is only manipulation if he makes the public comment and then sells the same day or shortly thereafter. He is presumably buying and holding for at least months.

 

[SeattleMoose]

I guess we are now out of "dump" mode and into "pump" mode.

All these gyrations have nothing to do with anything except opinions and editorials by WS manipulators and self-proclaimed analysts.

The sine wave continues on.....why fight it. BUY!!!

 

[macchiato2009]

wow, obvious market manipulation again, and the SEC stays quiet

 

[Mike MA]

Ok, one more buy in please so I can finally sell

 

[HenryDJP]

Wow, the responses are so funny. It's either one, the other or a combo of the three as follows:

(1) Samsung fans that are upset Apple's stock went up whether manipulated or not.

(2) Microsoft fans that are upset Apple's stock went up whether manipulated or not, especially since they can't make a dime off Microsoft's stock.

OR

(3) People sold their Apple stock when it began to plummet and are now P.O'd that they didn't hold on seeing as it's climbed back over $100/share since it went down to $399 over 90 days ago.

OR All of the above.

 

[Ochyandkaren]

It is legal, it is manipulation.

 

[iMerik]

So glad pensions are on their way out and almost gone completely and that this is the system many or most of us depend on for retirement. Finally time to purchase rental properties me thinks.

 

[Ochyandkaren]

No. If you are an investor you want customers to give you money to invest because you beat the market. You can't have a diversified portfolio and still get larger than market level returns.

This is only manipulation if he makes the public comment and then sells the same day or shortly thereafter. He is presumably buying and holding for at least months.

It is manipulation.
Even if you do not gain from the bet, by selling right away.
Is that so difficult?

You can benefit from this indirectly.

 

[TallManNY]

It is manipulation.
Even if you do not gain from the bet, by selling right away.
Is that so difficult?

You can benefit from this indirectly.

How is he benefiting indirectly? Also, considering he has to tell his customers what the Omega fund invests in, this is unlikely to be information that is very hard to figure out.

Financial advisors talk about their investments all the time. They have to as it is part of their business and they want the exposure so that they get new clients. Every investment is into a company which the investors thinks is undervalued. That is why the investor made the investment. Maybe they want the stock to go up and maybe this does a nice little bump. But if he holds the stock through the next earnings release, then the bumps from this sort of talk will be meaningless compared to the actual sales and profit numbers.

Same thing for any little investor. If you sold yesterday or today perhaps your price was manipulated a bit. But if you hold a stock for five plus years, this sort of talk is meaningless over that time frame.

 

[IJ Reilly]

It is manipulation.
Even if you do not gain from the bet, by selling right away.
Is that so difficult?

You can benefit from this indirectly.

No, he is correct. Manipulation is a very specific (and illegal) situation which does not occur simply by the means of buying shares. The absurdity of saying it does is pretty obvious.

 

[kenetic]

Will the stock go back up to $705? it will take some time.

 

[GfPQqmcRKUvP]

wow, obvious market manipulation again, and the SEC stays quiet

You must be joking. His position was disclosed in a 13F filing, which is legally required. Shall we make it illegal for investment managers to buy stocks?

 

[IJ Reilly]

I'd amend your statements ever so slightly. What some are calling "manipulation" is short-term perturbations in pricing. If an entity is confident in the existence of those perturbations and their directionality—or, even better, their ability to generate them—then that does open the door for gains. (It's basically informational arbitrage.)

However, in the long-run, such shocks or perturbations should not persist (which basically serves a corollary to the weak form of the Efficient Market Hypothesis, while still being agnostic on the issue of the ability to predict returns).

Fair enough. I never feel obligated to explain what happens in the markets in the short term, and for my purposes the short term is anything less than a month. It's the difference between being an investor and a trader.

----------

You must be joking. His position was disclosed in a 13F filing, which is legally required. Shall we make it illegal for investment managers to buy stocks?

It should be illegal for people we don't like to buy shares.

 

[Sir Real]

funny how big investors and the sentiment of "undervalue" can make the stock price up. not how the company is performing, how many billion dollars made, etc. stock market is still a mystery to me.

Ever been to Vegas and played roulette, and the roulette wheel was fixed?
Mystery solved.

 

[24Frames]

There is a big difference between knowing that Icahn is going to buy and that Icahn has bought. The first piece of information would be useful, the second isn't.

 

[techwhiz]

how is this not stock manipulation?

I used to think the stock market movers and shakers was a group of fat guys, smoking cigars in a back room trying to figure out who to screw tomorrow.

I was wrong.....

The stock market movers and shakers are a bunch of fat guys. smoking cigars and drinking good scotch, trying to figure out how to screw *EVERYBODY* tomorrow....

 

[IJ Reilly]

That is depressing. But one can invest properly and still be disgusted by the likes of what hedge fund managers and mercenary billionaires like Icahn get away with. Legal yes (usually). Ethical? Not so sure.

Please point out the ethical issues. I must be missing something.

 

[2457282]

If you do just a little research you will find that the when the price-to-earnings ratio is below 10 it suggest that a company is "UNDERVALUED". This is a standard metric in the financial investment world. Apple on June 26 was under 10. with all the news is has now climed to a P-E of over 12, which is still fair market. And depending on where you think the earnings are going you could still say that the ratio will be "UNDERVALUED".

Although some are calling this manipulation, I dont see it. I do see simple math and basic principles of finance being applied to decide on investment strategies.

Edit: here is my source for Apple P-E.... http://ycharts.com/companies/AAPL/pe_ratio

 

[iExpensive]

If you do just a little research you will find that the when the price-to-earnings ratio is below 10 it suggest that a company is "UNDERVALUED". This is a standard metric in the financial investment world. Apple on June 26 was under 10. with all the news is has now climed to a P-E of over 12, which is still fair market. And depending on where you think the earnings are going you could still say that the ratio will be "UNDERVALUED".

Although some are calling this manipulation, I dont see it. I do see simple math and basic principles of finance being applied to decide on investment strategies.

Edit: here is my source for Apple P-E.... http://ycharts.com/companies/AAPL/pe_ratio

Sure, it's not manipulation but someone of his financial can influence the growth of a particular company... Especially when commenting on it. This will ultimately end in his benefit when he sells. Without his contribution and influence, the price wouldn't be where they are now.

 

[2457282]

Sure, it's not manipulation but someone of his financial can influence the growth of a particular company. This will ultimately end in his benefit when he sells.

So what is an investor to do? If I see a company whose P-E is under 10, I guarantee you that I would investigate it. Given all the other fundumentals, this seems like a smart investment. Again no issue. The only problem here is that the SEC requires that such a large position be made public. And of course when that happens people react. I am not supporting these two investors, but what are they supposed to do, not invest their money?

They are playing by he SEC rules and as an investor they seem to be investing wisely. THe goal is afterall to make money from your investments, right?

 

[MacDav]

Ever been to Vegas and played roulette, and the roulette wheel was fixed?
Mystery solved.

I assume you are partly joking? While there is luck involved in playing the stock market, it is more like playing poker than roulette. If you study the game and really know what your doing, you can do quite well. You can still lose quite well also.

 

[IJ Reilly]

If you do just a little research you will find that the when the price-to-earnings ratio is below 10 it suggest that a company is "UNDERVALUED". This is a standard metric in the financial investment world. Apple on June 26 was under 10. with all the news is has now climed to a P-E of over 12, which is still fair market. And depending on where you think the earnings are going you could still say that the ratio will be "UNDERVALUED".

Ahhh, no. PE can tell you something, but it is not a magic number. Investors routinely bid up the PE of stocks far beyond a 10 multiple when forecasted earnings growth justifies it, and that does not mean that the company is overvalued. If earnings growth doesn't justify even a multiple of 10, then PE will drop accordingly, and that does not mean it is undervalued.

 

[heutusops]

just wait till 10th september, the stock price is gonna jump from $500 to $600. i wonder what's apple cooking with the help of these guys.

 

[Swift]

I'm so glad we're back to the days where one or two investors can manipulate a stock by manipulating other investors. Whether they are right or wrong in their predictions, they will come out as winners.

When you have that much money to put behind your con game, it becomes real. No, sir, this isn't three-card monte, I'm a real investor! First my money pushes up the market, then the hangers-on. Oh, look! He sunk money in Apple! Follow him! At peak, shortly afterwards, you sell. To no publicity, unless you want to then go on the shows and say, "Apple should be more giving of their cash to creeps like me!" Er, they need to give away money to people with money. Not in lower prices. Not in radical designs -- that risk eating up some of that capital. No give the money as a bribe, and "Wall Street" will delay picking at your bones. This guy is a sleazy '80s knockoff.

 

[2457282]

Ahhh, no. PE can tell you something, but it is not a magic number. Investors routinely bid up the PE of stocks far beyond a 10 multiple when forecasted earnings growth justifies it, and that does not mean that the company is overvalued. If earnings growth doesn't justify even a multiple of 10, then PE will drop accordingly, and that does not mean it is undervalued.

Okay, I did simplify my example. Clearly there is a lot more that goes into an investment decision than P-E. But there is nothing wrong with the fundumentals for Apple and it is clear that based on all their numbers they were undervalued. You state that they had three quarters of slowing growth in an earlier post, but that is not the same as declining revenue. Apple still turns a significant profit and still continue to grow at what can be considered a healthy pace for a company their size. And they are flush with cash. Really unless you are an "apple is doomed" type, there is little in terms of the published numbers to suggest that the stock price is overvalued in anyway.

You might argue that it's fair market, but given their numbers I think that Ichan statements make sense. The facts speak for them selves on this point. Our opinions on the other hand need some help