Apple’s share price plummeted yesterday, following the news that Steve Jobs has again taken medical leave of absence from his role as chief executive.
While Apple timed the announcement to coincide with a day-off for Wall Street, Martin Luther King Day, it couldn’t do anything about the reaction on the Frankfurt stock exchange. Shares fell by 9.7% in an hour, though later in the day a more sober reaction prompted a recovery. The stock price ended the day 6.6% down.
Investors and Apple watchers are genuinely concerned that Jobs’ cancer has returned. Apple has declined to give a specific reason for Jobs’ absence — asking that his privacy be respected as it did when the chief executive took six months in 2009. Only later did news of his liver transplant leak to the press. Many think that, given Jobs’ unique contribution to Apple, the company’s board should provide more information about his illness.
Tech blogger and former MacUser editor Ian Betteridge tweeted that the situation is no different to that two years ago, when he said the board should provide details.
“Apple is not Steve: it’s the property of its shareholders. And Apple’s board’s duty is look after the interests of shareholders,” he wrote. “Of course, in part that means looking after Steve, who’s the most important employee. But if it’s a conflict between what Steve wants and what’s good for the shareholders, they have to come down on the side of the shareholders. That might sound inhumane, or harsh, but that’s just what they have to do.”
RBC Capital analyst Mike Abramsky says that, in fact, the situation is less clear than it was in 2009.
“Limited disclosure (no indication of reason or seriousness or timing) may sustain uncertainty, including fears that Steve might not return this time (note last time Steve stepped down he specifically indicated he’d return in 6 months, but not this time),” notes RBC Capital analyst Mike Abramsky.
However, in common with other analysts, Abramsky is confident that the stewardship of chief operating officer Tim Cook, in alliance with Apple’s respected and hugely talented executive team, will be just as successful as it was two years ago.
“Apple has an otherwise strong management team and talented workforce with Tim Cook as operational leader; Apple has a lengthy product pipeline and enormous sustained advantages which are likely to continue to sustain its business and leadership; last time stock fell 3% on the day of the announcement only to subsequently rise 57% in the first six months of 2009 even with continued uncertainty and despite lack of news over Steve’s health and long-term status at Apple.”
Good news for Apple will come later today when the company announces its financial results for the last three months of 2010.
The most conservative estimates project total revenue of $23 billion, an increase of almost 50% on the same quarter last year, while leading Apple financial bloggers believe the figure will be more than $25 billion, a staggering achievement for a company that took just $2 billion in the corresponding 2004 quarter.
