If you’re scratching your head at how Apple (AAPL) shares can crash from $700 to just $450 over the span of just a few months despite posting enormous profits while Amazon’s (AMZN) shares can soar to new heights despite recording a yearly loss, you aren’t alone. The Street’s Eric Jackson recently spoke with several big-name Silicon Valley venture capitalists and discovered that most of them view the tech stock market as either irrational or rigged. Or put another way, many Silicon Valley bigwigs are just as bewildered by how Wall Street views the tech industry as the rest of us non-MBAs are. More →
Facebook, the world’s largest social networking website, will join the likes of Apple and Google on the NASDAQ stock exchange after its initial public offering, The New York Times reported on Thursday. The publication cites unnamed sources with its report. The social network’s shares will be listed under the “FB” ticker symbol and are expected to go public some time next month. “It’s a high profile win for their listings business,” said Michael Adams, an analyst Sandler O’Neill. “In terms of earnings, the impact won’t be dramatic, but it’s something to be proud of.” The social networking giant filed with the U.S. Securities and Exchange Commission in February, and it could raise as much as $10 billion at a $100 billion valuation when it goes public. More →
NASDAQ on Tuesday announced that it will adjust the weighing of several companies in the NASDAQ-100 index to better reflect their market capitalizations. The NASDAQ-100 index is comprised of the 100 biggest non-financial stocks on the NASDAQ exchange. The adjustment, which will take place on May 2nd, is the first of its kind since 1998. Apple will take the biggest hit as its weighting will be adjusted down from 20.46% of the the index to 12.33%. The Cupertino-based company’s representation on the NASDAQ-100 is currently six times that of the No. 2 company, Microsoft, which will see its weight doubled on May 2nd. A total of 82 stocks will be adjusted downward while 18 companies including Microsoft, Google, Intel, Cisco and Oracle will get larger shares. More →
With Steve Jobs’ medical leave from Apple, many expected the company’s stock to get hit quite a bit — and they’d be right as shares of AAPL are down around 5% as the market opens this morning. Don’t forget that Apple is reporting its Holiday quarter earnings later today, however, and the consensus is that Apple will have the biggest and most profitable quarter ever. Apple’s earnings can and most likely will help the stock overcome the impact of Jobs’ leave from Apple, at least temporarily — as was clearly Apple’s intention with the timing of yesterday’s announcement. With Apple’s extremely solid product lineup for 2011 (as it has been rumored), we’ll have to see how the stock fares long term.
Some analysts could soon find themselves in hot water as the U.S. Securities and Exchange Commission has opened an investigation into the legality of “channel checks.” Channel checks refer to the practice whereby analysts contact inside sources at manufacturing companies in order to glean inside information. This information often has a tendency to move the market, of course, but the SEC is now trying to determine whether or not the practice should be legal. “Insider trading basically comes down to where you know or ought to know that the person from whom you’re getting this information has a duty to someone else to keep it confidential,” former SEC commissioner Paul Atkins told The Wall Street Journal. “If you go in and pay the mail clerk to give you special information, that’s not proper.” Beyond just the analysts involved, the SEC is also investigating “expert networks,” which get paid to connect investors with inside sources. More →
What happens when you write a fake story that Steve Jobs had been rushed to hospital suffering a heart attack and post it on CNN’s ireport.com website? You will cause Apple’s stock to plummet and lose nearly $4.8 billion in market value before the story is debunked by Apple. You will also find yourself on the wrong end of an agressive SEC investigation. Such is the case of “Johntw”, the 18 year old author of said blatantly misleading and false post. According to anonymous sources familiar with the probe, the SEC has not uncovered any evidence of illegal trading on behalf of the author. Obviously the author didnt do it for the money, which begs the question why did he do it? Was it out of Boredom? Was he desperately craving some notoriety? You would think that the image of Palin email hacker, David Christopher Kernell, walking into federal court in handcuffs, shackles, and tennis shoes would be a major deterrent to pulling such high profile stunts. You would think?