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Comment by chugger | Hacker News Reader

Most of these rumors are started by hedge funds with short positions in Apple.

1) Spread rumors about a product 2) Watch stock price go up 3) Wait for the actual product announcement 4) Short sale 5) Profit$$$

it happens everyday.

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Any sources for this?

Long nicknamed the “favorite yo-yo” of daytraders and hedge fund managers – Apple’s high beta of 1.43, its prominent position in finance media and its vulnerability to rumors has made it a choice stock in short term profits, both through long and short positions http://www.investorguide.com/article/6809/apples-aapl-mini-c...

Hedge Funds, Bloggers and the Origin of Apple Rumors http://tech.fortune.cnn.com/2011/03/30/about-that-iphone-5-d...

Samsung employee caught leaking information to hedge fund manager before iPad launch http://www.bloomberg.com/news/2011-09-14/ex-samsung-worker-s...

I don't know about the spreading of rumours, but alot of funds short apple on the day of product announcements as their stock almost always goes down during the announcements.

It's pretty much free money.

In fairness, that sounds apocryphal. If it were really common then there would be no money in doing it because the market would have factored in days before the event the fact that the price were going to fall.

I'm not offended:)

Call it what you want, but it's been a winner for the past 4 years for us.

Why they watch the price to go up for short sale opportunity instead of just buying at the lower price?

Because the profit comes over a shorter period, i.e. shorting stock from the 3rd to the 5th. If they just bought at the lower price after the announcement they would have to wait for a longer period before they would gain the same profit as through shorting the stock.

Yep. I ignored the equity angle but it's a must stronger force in this whole charade.

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