Apple investors, are you wondering why Apple headed down again. Well, After the break we have a simple explanation with one theory, shows why that’s happen with the company, follow us!
Apple Headed Down Again
The company has been, as Economic Timing’s Jason Schwarz puts it, “in sell-off mode for over two months, even in the midst of its greatest quarter of sales in history,” Schwarz offers an explanation.
He believes the current wave of selling is linked to the co-called special dividends that hundreds of companies from Costco to Walmart have issued in recent weeks.
“Apple’s refusal to issue a special dividend,” Schwarz wrote Tuesday in Seeking Alpha, “is causing a third wave of its sell-off that began on September 21st.
“The first wave was caused by institutional re-balancing due to Apple’s 74.9% YTD returns, the second wave was caused by the hangover effect of President Obama’s re-election and the third wave is being caused by special dividend posturing as funds sell Apple in order to gain exposure to the dividend bubble.
“This new variable is what caused Apple to deviate from its weekly pattern on Friday. As soon as funds became convinced that Tim Cook wasn’t going to participate, they began transitioning out of Apple for the short run.”
Schwarz is advising investors whose patience with the stock hasn’t yet worn thin to keep buying the dips. “This dividend bubble will likely enhance Apple’s next rally,” he writes. “But we’ll need to endure another dip before it takes off.”
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