If there's one stock on the market that's unpredictable, it's Apple's. Let's just take a quick look back at the last few weeks. Apple in late January posted the best quarterly earnings report any tech company has ever had in history. And though Apple slightly missed analyst's revenue projections, Apple's overall profits slightly bested the consensus on Wall St.
The result? Shares of Apple absolutely tanked, with no rhyme or reason. In contrast, Amazon continues to lose money and Wall St. continues to send shares of the nation's largest retailer into stratosphere.
Flash forward to this past Thursday. Apple released a press release addressing a shareholder complaint alleging that Apple wasn't doing enough to return money to shareholders.
We find ourselves in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone.
Apple’s management team and Board of Directors have been in active discussions about returning additional cash to shareholders. As part of our review, we will thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock. We welcome Greenlight’s views and the views of all of our shareholders.
So essentially, Apple simply reeiterated what anyone following the company already knew - Apple has a lot of money and is constantly evaluating its options as it pertains to returning cash to shareholders, either via dividend payments or buying back shares which can boost a company's shares. Indeed, Apple executives have stressed this very point during the company's last few earnings conference calls.
The fall out? Apple shares - which were trading at $457 on Thursday afternoon - are now trading at $474 a share.
And while Apple investors are certainly glad to see the stock rebound slightly, it really illustrates the absurdity that often plagues Wall St. and leaves investors scratching their heads.
As a quick summary, Apple posts ridiculously impressive earnings and shares plummet. Apple restates what investors should have already known and the stock rises.
That's the street for ya, where cold hard numbers are seemingly insignificant and press releases carry more weight than one would imagine.