The degree to which Apple’s stock price is related to the health of its CEO was illustrated again yesterday when unsubstantiated rumours that Steve Jobs had been admitted to hospital sparked a sharp dip in the price of its shares.
At one stage in the early afternoon EST, the price fell from $355 to $349, wiping $5bn off the value of the company in a matter of minutes. The stock recovered its losses, closing at $355, having peaked at $360 earlier in the day.
This wasn’t the first time that concerns over the CEO’s health have caused a dip in Apple’s share price. When Jobs’ announced to Apple employees in January that he would be taking a period of medical leave, shares in the company fell by 7.5% on the German stock exchange. And concern over Jobs health in 2008, which weren’t helped by Bloomberg accidentally publishing a template obituary, spooked shareholders.
Investors’ fears will have been allayed somewhat by yesterday’s Wall Street Journal which reported that, according to its sources, Jobs has been ‘has been taking business meetings at home and on the phone.’
While the knee-jerk reaction to negative reports of the CEO’s health is usually a stock sell-off, longer term investors are more pragmatic. Apple’s share price has risen by nearly 2% since Jobs announced his leave of absence last month. And during the CEO’s last medical absence, for a liver transplant, in 2009, the stock price rose by 78% during the six months he was away.
