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Apple: Tim Cook Regains Control of Stock

Tim Cook, Apple Chief Operating Officer
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Tim Cook, Apple Chief Operating Officer

Just when we were preparing to sell additional Apple positions on Monday because of the continued selling pressure on the stock, the action reversed in a major way.

In the early hours of trading, the Dow Jones Industrial Average was up 140 points and Apple was being held down (it was up $1).

We figured that the hedge fundswere following though with their sell-off attempts of last week but at 1:30 pm EST, it all changed as Apple skyrocketed $10.

What might have caused the jump? Most likely it came from leaks connected to CEO Tim Cook’s trip to China. The last thing a selling hedge fund wants to discover is that there is good news hitting during a supposed quiet period.

Cook is proving to be less predictable than Steve Jobs was. We’ve seen it with the dividend, the delayed iPhone 4S release, the iPad name, the quick responses to market rumors, Cook’s unexpected presentation at the Goldman Sachs conference and now this surprise China trip.

In the past, short sellers loved using Apple because its secrecy and calendar-driven innovation opened the stock up to uncontested manipulation during the quiet periods. That precedent may be coming to an end.

The threat of Cook disrupting a pre-planned sell-off is not good for the shorts. This kind of action proves that our increased core position in Apple was and is the right move.

Instead of selling to 70 percent to 90 percent cash during an expected sell-off like we did last year, 2012 requires us to hold onto larger allocations of Apple.

Investors are discovering that Cook doesn’t want the market to think that it’s in charge of Apple’s price movements. He is.

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Disclosures:

TheStreet’s editorial policy prohibits staff editors, reporters, and analysts from holding positions in any individual stocks. At the time of publication, contributor Jason Schwarz was long Apple.

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