· A $1.32 billion $AAPL trade proceeded at 4 pm on Friday, December 2, 2022.
· There are speculations about what the hefty purchase could have been about, but there are interesting patterns.
· Warren Buffet’s company also recently bought a $4.1 stake in TSMC, an Apple’s 2024 4nm chip producer.
Bullish investor buys $AAPL shares valued at 1.32 billion
At the closing hour on Friday, December 2, 2022, a bullish investor bought 8,915,177 units of $AAPL at $147.81, with a total notional value of $1.32 billion. The purchase amounted to about 10% of the total average traded volume. Expectedly, the move quickly caught the eyes of Redditors, with many users trying to make inferences about what it could indicate.
Apple on share buybacks?
However, one user pointed out a pattern, stating that a similar purchase had happened the previous week at an even higher notional value. The user wondered if it was Apple doing some share buybacks. Comments quickly reminded the user that Apple has been doing share buybacks for about a decade.
At the end of the 2022 fiscal year, Apple bought back about $90.2 billion worth of shares, up from the $85.5 billion it bought in the 2021 fiscal year. Apple’s actions regarding its shares are no secret, as the company reports the buybacks quarterly. The technology company has spent about $550 billion on share repurchases over the past decade. The last reported buyback, in September, was about $24.43 billion.
Though currently down by 0.34% (one trading day) as of press time, $AAPL has historically been a good buy for long-term investors, with the $2.3 trillion company always returning capital to investors. A Bloomberg piece exploring how Apple has used buybacks to keep investors captivated explained how some investors don’t care much about how the company returns capital to them as long as it doesn’t stop.
So far, buybacks have been a good strategy for Apple to keep investors interested and continue towards growth while it innovates new product lines that could increase its value. For instance, Apple first reported its interest in car production in 2008 after Steve Jobs launched the original iPhone. A long history of micro steps followed, but significant progress has yet to be made. Only the rumor about Foxconn and Luxshare being the top 2 candidates considered for the production seems noteworthy as of this year.
The Warren Buffet situation
As a characteristic of the stock market, such major activity sends investors on high alert. But there is quite some detail to consider when it comes to Apple. For instance, on November 15, 2022, Berkshire Hathaway, Warren Buffet’s company, disclosed acquiring a $4.1 billion stake in TSMC. It should be remembered that TSMC will reportedly start producing 4nm chips for Apple in 2024 via its Arizona plant.
The 4nm chip is used in Apple iPhones. The production announcement explained a shift from TSMC’s initial plan to produce 5-nanometer chips, thanks to the ‘urging’ from Apple and other companies. It’s also noteworthy that the production announcement came a few days after news of the COVID-related deplorable welfare at Foxconn’s Zhengzhou factory went mainstream. With such bad PR, it’s only normal for Apple to do some damage control, which could explain the change in TSMC’s stance.
A 2024 production date plays well into Berkshire Hathaway’s books, which are known for their long-term investments. TSMC’s share price is up by 25.38% over the past month.
The Elon Musk situation
Alternatively, on November 28, 2022, Elon Musk tweeted, “Apple has also threatened to withhold Twitter from its App store, but won’t tell us why.” The tweet sent $AAPL on a downward slope over the next trading day. A video tweet two days later from Elon about visiting Apple Park to discuss with Tim Cook salvaged the situation as the $AAPL share price promptly rose from $141.17 to $148.03 over the November 30 trading day. $AAPL has risen about 1.91% over the past five days.
Some Redditors joked about how last Friday’s (December 2, 2022) hefty purchase could be Elon’s and that investors should expect to hear more SEC movements.
Apple’s hiring freeze also comes as major recent news indicating the company’s interest in running a tighter ship – which is always good news for investors.
There’s no certainty as to why such a last hour purchase happened. And until Apple makes another quarterly investor report, it can only be assumed that someone out there is bullish about $AAPL. On the flip side, the trade means someone sold $1.3 billion worth of shares, and more of such is expected as the world heads towards the holidays.
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