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Apple Punished for Its Success

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Such is the price of a runaway success.

In the last two years, Apple's stock has tripled in value. And because of this, well, it must atone. The Nasdaq announced it will reshuffle the Nasdaq-100 and cut Apple's weighting to better reflect Cupertino's market value. It would mark the first time that such a move has taken place since 1998.

According to Bloomberg, Apple's representation will be cut on May 2, dropping from 20.49% to 12.33%. Conversely, the weightings of Microsoft and Cisco will more than double. Google, Oracle, and Intel will also see their weightings rise.

Tim Schroeders, a Melbourne-based money manager, told Bloomberg that the reshuffling "would probably affect international funds, given that Apple is such a big company globally." He added, "Passive funds in particular will be forced to re-weight into those stocks that have had increases in weightings, and in the short term we will see some selling pressure on Apple."

The success of the iPhone makers' stock greatly skewed the Nasdaq-100 weighting system. Although Apple's market value is 46% bigger than Microsoft's, its weighting is six times that of Redmond. A change was needed.

However, as investors diversify to match the new balance, Apple's stock is expected to take a hit.

Which goes to show you: Aim high, but not too high.

(See also: Android Can't Be Stopped)
POSITION:  No positions in stocks mentioned.