Two theories for Apple's fall, neither of which has to do with fear, uncertainty or doubt
FORTUNE — Apple’s AAPL share price briefly touched $505.75 in Thursday’s trading — $200 (28.3%) off its mid-September high.
We needn’t spell out here all the reasons that have been put forward over the past two months for why the stock was due for a fall. There’s a whole literature of Apple FUD (fear, uncertainty and doubt) — often delivered in the form of top 10 lists — to explain the stock’s steady retrenchment to a share price it hadn’t seen since February.
Which is why I was particularly interested in two theories that emerged Friday.
The first came in the form of a rumor spread by Doug Kass, the author of one of the most famous of those top 10 lists. (See Meet one of the guys.) He tweeted Friday that Apple was getting clobbered by hedge funds hit with big margin calls. The whole market was being driven down by fiscal cliff fears, but the Apple shares in their portfolio — even at their depressed valuation — could still be sold at a profit, so that’s where hedge fund managers turned to raise cash.
The slingshot, he wrote Friday, is often misunderstood as being caused by negative articles about Apple in the media. Quite the opposite, he says. It’s caused by mutual fund managers rebalancing a stock they’ve loved too much.
I’ll let Jason tell the story:
Makes sense to me. And it could explain why Apple, after hitting that nine-month low Friday, bounced nearly $22 to close at $527.68.
Schwarz’s piece is called Apple’s Institutional Slingshot: Rational Explanation Of Irrational Stock Action.