CHARLOTTE, N.C. ( Stockpickr) -- On Aug. 13, the share price of Apple ( AAPL) had been hammering relentlessly for two hours at the immovable $475 resistance level when, at 2:21 p.m., Carl Icahn tweeted: "We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come."
What happened next -- the instantaneous result of this tweet -- is very dramatically represented in the chart below and is being referred to by many as the "Icahn Effect." People like to point at the past year's amazing run-up of Netflix's ( NFLX) stock price as a prime example of this so-called Icahn Effect. One of the most common questions people are now asking me is: Will Apple's stock price soar the way Netflix ran up after Icahn announced a similar large investment last year?
To best answer that question, we should look at the situation from several different angles, and come up with several possible scenarios, based on several different metrics.