Thursday, February 25, 2010

Are Apple Splits better than Banana Splits?

So conveniently right after a large investment bank's trading desk when long the market, a rumor gets floated to CNBC that Apple might split their stock and the market practically erased all loses. Suddenly, Greece, job losses and falling new home sales won't matter because we can all buy more iThingy shares!!!

All tech stocks have a history of splitting 1 too many times. Microsoft split 7 times from 1990 to 1999. They've split their stock once since then - 2003 - and the stock has gone nowhere for the last ten years. Intel hasn't split since 2000 and their stock is down about 25% from that level.
Dell split 6 times in the mid 90's and has fallen about 60% from it's early 2000 levels. Apple has doubled in the last year while volume has dried up --- expect the CNBC talking heads to go crazy over this story and the 3 of you still watching CNBC should be aware that it's mostly hype (inside sources have referred to the FOXification of CNBC that has forced CNBC to avoid nuance. Things are all black and white in their world.)

Just when I'm about start giving Washington some credit - see yesterday's post on Start-up Visa's - word leaks that the Federal Gov't is considering prohibiting foreclosures until the mortgage has gone through the modification process (a process that has been fraught with mismanagement and mistakes).

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

A home isn't guaranteed in the constitution the last time I checked. In my opinion, if you entered a contract and you can't meet your obligations under that contract, the bank has the right to seek remedies offered to it under the law.

Once again we seem to be changing the rules of the game mid-stream.

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