SEC Investigating for Insider Trading Due To Apple Supply Chain Stock News

Discussion in 'Android News' started by dgstorm, Jan 14, 2013.

  1. dgstorm

    dgstorm Editor in Chief
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    This news is definitely not directly Android related, yet it seems very relevant to share considering it's news about its largest competitor. First, Apple's stocks recently took a negative hit upon hearing news that the company had to downgrade their original order of iPhone 5 parts by almost half, because of expected weak demand.

    Second, industry analysts supposedly received leaked info from Apple's supply chain that this was the case, and the stock market followed suit by "short-selling" Apple stock. (If you are unfamiliar with this investor term, it basically means that if you expect a stock price to fall, you can borrow the shares from a broker, and then sell them at current value. You do this in exchange for buying them at the lower price you expect them to hit.) This short-selling caused Apple's price to drop rapidly and it nearly fell bellow the $500 dollar mark.

    Since this occurrence, the SEC decided to get involved and is now investigating to determine if insider trading was a factor in these events. Apparently, the SEC is investigating these "channel checks" that are provided to stock analysts to try and reign in and keep a check on these behaviors. Here's a quote with some additional detail,

    Even if the SEC's investigation turns up no overt impropriety, the implications of this investigation are news "leaks" may diminish greatly for a while as the SEC puts pressure on the industry to shore up information security vulnerabilities. Sadly, this will likely lead to less rumors for a while on upcoming new devices. :(

    Source: PhoneArena
     
  2. jntdroid

    jntdroid Super Moderator
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    I'm a little torn on this. On the one side, rumors are fun. But on the other side, I'm in said industry, and I get sick and tired of seeing these "expert" analysts with their sometimes baseless predictions. If this cracks down on the latter at the expense of the former, I'll deal with the lack of rumors for awhile.
     
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  3. dgstorm

    dgstorm Editor in Chief
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  4. jntdroid

    jntdroid Super Moderator
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  5. mountainbikermark

    mountainbikermark Super Moderator
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    Some traders bought an iPhone5 , thought about what they bought after looking at it, said to themselves "this thing sucks for supposedly being such a huge improvement" quickly got on the phone and said "we better sell off some stock because there's no way under the sun that parts order isn't going to get cut big time because this thing ain't gonna sell"
    No insider trading, just common sense taking over I'd bet

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  6. cybertec69

    cybertec69 Silver Member

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    The one BIG reason the iPhone is still selling as well as it is, is because 80% of it's users have invested thousands of dollars into their system "app. music, movies", it is just not feasible to switch.
     
  7. akhenax

    akhenax Silver Member

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    I for one hope the rumors are true, so that stock prices fall enough for me to be able to afford to buy some. :D
     
  8. jpiarull

    jpiarull Active Member

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    Funny you should mention that. I major in finance and can honestly tell you that stock price is overvalued by over 300%. Price/share is going to drop like a rock watch it happen.

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  9. jntdroid

    jntdroid Super Moderator
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    Doesn't that apply to most of the US equity market right now? Maybe not 300%... but significant over-valuation across the board.
     
  10. mountainbikermark

    mountainbikermark Super Moderator
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    Yes

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  11. pc747

    pc747 Administrator
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    Can't make money by.....never mind .
     
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