Apple's (AAPL) New Dividend Could Cause 'Feeding Frenzy' and Push the Stock to $1000

Now that Apple (Nasdaq: AAPL) has initiated a dividend, everyone is asking "now what?"

According to one theory, the rush by income funds to acquire the stock could create such a supply/demand imbalance that shares could break $1000.

While Apple could be worth about $800 just on pure fundamentals, we aren't talking fundamentals -- we're talking pure greed.

Apple only had 932,370,000 shares of common stock issued and outstanding as of January 13, 2012. Compare this to 8.4 billion for Microsoft (Nasdaq: MSFT).

Growth funds, hedge funds, and now income funds will be in competition for the shares which could create a feeding frenzy.

In a February note to clients, JPMorgan's Mark Moskowitz explained this theory. He said while Apple is the largest stock in the Russell 1000, 40 percent of mutual funds indexed to the Russell 1000 do not have Apple as a top 10 holding. Also, just 77 percent of Apple's shares are held institutionally, underweight versus the S&P 500 overall and the average technology-sector holding. Now that income-based funds are going to be forced to scramble to build positions, a "scarcity issue" could ensue.

Shares of Apple are up 1.7 percent to $595.34.

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