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] stock, I don't think anyone would argue about what seems to be a year's worth of heavy market manipulation surrounding this company. And following the massive amount of media attention lavished on Steve Jobs' and Apple's decision to back out of Macworld, I thought I'd address another related topic: What could become a grassroots campaign to bring back the so-called Uptick Rule.
The Apple-centric blog MacDailyNews.com has taken the lead in putting forth the idea that the time has come to take drastic action to prevent even more manipulation than already's gone on Apple shares. The blog says, "There's only so much Apple shareholders can take."
Consider that this company continues to excel even in the face of recession. But any momentum Apple enjoys is quickly, electronically dashed by those betting against the company. The web lights up with concerns about Steve Jobs' health; whether he's dying; or will be incapacitated; or will be resigning or retiring. And shares get destroyed, no matter how fundamentally solid Apple might be.
We saw the same thing during the SEC investigation into backdated stock options and the swirling rumors that at best held Apple shares at bay, and at worst, dragged them lower by 15 percent or worse.
Read the financial message boards. Filled with rumor and innuendo. (I've stopped. What's the point?) MacDailyNews points to an almost incompetent Securities and Exchange Commission (I direct you to a number of horrific financial fiascoes over the past several years, like Enron, WorldCom and now Bernie Madoff) as a reason why regulations need to be put back in place to protect the little guy. As if that's possible.
Life has gone electronic. Day-traders relying on quick electronic trades almost seem quaint in today's server/router/nanosecond trading environment controlled by massive enterprises with equal access to message boards, media, and viral leaks that create news rather than react to it.
MacDailyNews cites a great comment from John McCain last September: "The regulators were asleep, my friends, they were not working for you. (The SEC has allowed abusive short-selling to turn) our markets into a casino." Great point. And consider that if Bernie Madoff clients can be killed by massive market manipulation, how can the little guy expect to compete on a level playing field?
Some will make the fallacious argument that free markets and a right to free speech come at a cost; that some will use those freedoms for their personal gain. Which is kind of the point. Aren't investors in the market for that precise reason? To make money? It's when they use power and technology and manipulation to bend or break the rules that the situation gets dicey, and where investors have a right to expect government to step in and enforce the rules. I'm a free-market guy. Short. Long. Make money any way you can as long as play by the rules, the same rules, as everyone else.
The fact is, posting "gaunt," or "frail," or "Steve Jobs is ill" is the financial equivalent of yelling fire in a crowded movie house. And if that kind of thing is going to be tolerated, government should step in and either investigate the manipulators, or bring back the Uptick Rule.
I've long said that if Steve Jobs dies of natural causes, of old age, the shorts will line up and scream, "We told you so!"
If this craziness and manipulation can happen to Apple, where manipulators control the message, it can happen to any company. MacDailyNews offers an either/or scenario: Either Steve Jobs leaves Apple because he has become too much of a liability, or the Uptick Rule has to return. What a shame that manipulators have seized so much control that (a) we're even talking about Steve Jobs as a "liability" and (b) that even free-market supporters have to consider government intervention to level the playing field. But it sure would serve the shorts right.
Jobs should stay. And manipulators will get what's coming to them.
Questions? Comments?
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