Technology

Apple Inc. Dumped By A Popular Hedge Fund

A popular hedge fund has moved against the trend by dumping Apple stock and betting big on Microsoft

Apple has been dropped by the popular hedge fund Bridgewater Associates, and the firm’s current holding was cut by half as of the end of 2014 compared to the third quarter of 2014. During the same period, the hedge fund raised its bet on tech juggernaut Microsoft.

A bold move to dump Apple

The iPhone maker is seeing a startling rise in its shares, but hedge funds like Bridgewater Associates are going against the flow. The firm’s total holdings in Apple at the end of 2014 was $28.6 million, a drop from $53.9 million from the end of the third quarter of 2014. During the same period, the hedge fund increased its Microsoft holdings 4,000% from just $679,000 at the end of the third quarter to $27.9 million at the end of 2014. It should be noted that the equity holdings represent a small fraction of the $160 billion plus managed by the fund.

Apple Inc. Dumped By A Popular Hedge Fund

Bridgewater’s move to drop Apple could be called audacious in the event that it is betting through its money. Hedge funds are known as “smart money” because they have substantial funds to make bets, which are generally against the current market movement. Wall Street analysts, on the other hand, are not confident enough to raise their voice and take a cautious note on Apple’s continuously-rising stock.

Strategy not worked so far

Dumping Apple stock and taking up Microsoft has not worked very well for Bridgewater so far this year, says a report from USA TODAY. Apple stock has been in the uptrend after reporting record iPhone 6 sales for the fourth quarter. On the other hand, Microsoft has been witnessing declining investor confidence, as its shares have dropped because the company’s move into faster growing areas is taking more time than expected.

Apple is making high-end smartphones and selling them at high prices and making consumers buy costly cell phone plans compared to smartphones that have exciting and comparable features at only a fraction of the cost. Loyal iPhone fans and new users make the business run as a loop for the company, which is making profits like the U.S. has never seen before.

Apart from hedge funds, there are a few analysts who are talking against Apple. On the other hand, there are investors who are confident about Apple becoming the first U.S. $1 trillion company.

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  • baligeko

    WTF were they thinking.

  • DEVVVV

    yea bad move also I believe. If a company is able to continue innovating the sky is the limit. I hope Apple investors realise that on BlackBerry ticker news, BlackBerry’s loyalists are slamming Apple left, right and center. Get over there and defend your favorite company.

  • ralpheatsbeef

    Bold move? STUPID move!

  • Sohail Karimzad

    hahaha same thoughts here!

  • Sohail Karimzad

    @markgriz, no it’s not, the point is to sell AFTER it’s appreciated, not before, and buy an asset when it’s undervalued, not before its undervalued ;)

    14.5% + 7.2% = they’re 21.7% down from where they could’ve been.

  • markgriz

    While I happen to agree with you, there is certainly no crystal ball.

  • markgriz

    Isn’t that the point? To sell an asset that has appreciated, and to buy an asset that is undervalued?

  • BananaBonanza

    … except they sold way before it reached the all time high.

  • Richard Torcato

    If the headline was “hedge fund dumps apple for microsoft” I wouldn’t have bothered to read any further. Thanks for wasting everyone’s time!

  • Kevin Leo-Smith

    “Dumped”, “Dropped” – sensationalism if Carl Icahn sold 50% that would mean selling over $3 billion – that would qualify as “dumped” – in the grande scheme of Apple or Microsoft this portfolio balancing after taking significant profits on Apple is hardly dramatic!

  • Lars Pallesen

    Where by “dumping AAPL” you mean they have sold their AAPL stock. Selling an asset when it has reached an all time high price is not all that uncommon. Actually that’s the whole idea behind stock investment.

  • icposse2k

    Haha poor move. AAPL is up 14.5% for the year; MSFT is down 7.2%.

  • mds

    They are a criminal enterprise churning people’s money.