Apple Investors Are Wusses
by John Paczkowski
Posted on January 15, 2009 at 7:11 AM PT
Ironic, isn’t that, that in this decade of CEO scandals and corporate duplicity, shareholders are punishing Apple–which in its last quarterly statement, reported earnings of $1.14 billion on sales of $7.9 billion, with nearly $25 billion in cash–for allowing CEO Steve Jobs a medical leave of absence?
Apple (AAPL) shares dropped as much as 10 percent Wednesday evening after the company broke the news, slashing more than $6 billion off its market cap. And they’re trading lower again today.
A timid group, Apple investors–risk-averse and apparently too easily frightened to actually own the stock.
Faithless.
To sell on this news, or any of the Jobs-related health rumors or reports the company has suffered this past year, is silly.
Because if Jobs were to leave Apple–willingly or otherwise–people won’t suddenly stop buying Macs. The iPod won’t suddenly go the way of the Walkman and early adopters won’t suddenly lose interest in the next-gen iPhone. Nor will the Houdini-meets-Edison magic that Jobs has brought to Apple suddenly dissipate.
Yes, Jobs’s sensibility pervades Apple’s culture and its products, but that culture and those products are not tethered to his health or day-to-day presence at the company. And Apple’s deep executive bench is more than capable of running it–and running it well–in his absence.
iPhones worldwide will not stop working if something should happen to Steve–although apparently there are quite a few investors who believe this is indeed the case.
Apple will endure–with or without Steve Jobs. There will be a post-Jobs era, and whether it begins this year or 20 years from now is of little consequence. So if you’ve sold your Apple shares on any of these Jobs health reports…well, you won’t be watching them spike when the company announces the next iPhone or reports another blowout quarter, now will you? Perhaps, your allowance is better spent on something else….
“Apple doesn’t need Jobs anymore,” wrote Ezra Gottheil of Technology Business Research. “He’s established three sound businesses–Mac, iPod and the iPhone–and the company knows how to execute his fanatical devotion to design and usability. There’s a stable management team in place, and they know what they’re doing. Without Jobs, Apple would have to pay a lot more to get the world’s attention. But he’s got a company and a brand and an organization and a strategy in place. There’s no reason to think that those things can’t be carried forward without him.”
No reason at all.
Comments
I’m with you brother… I hope all these wusses who can’t take it get out so I can start making money again…. Steve is king but he’s taught the kingdom very well !!!!
Posted by Anthony Gasparino at January 15th, 2009 at 7:26 amJohn – there’s someone on the wrong side of every trade. I kind of wish you’d waited to write this article.
Joseph Kingsbury
Posted by Joseph Kingsbury at January 15th, 2009 at 7:26 amText 100
(disclosure: long aapl)
I agree MOST Apple investors are idiots. I’m a long time fanboy and investor and know that your average Apple consumer doesn’t give two squirts about Steve Jobs. Yes, he has been the visionary that has driven the company these past years, but if he dropped dead tomorrow, I doubt the company would just curl up and die too. I’m confident that all who work there know very well what has worked for them and what has created their current success. I don’t think knowledge that will just disappear with out Jobs at the helm.
Posted by Tim Dailey at January 15th, 2009 at 8:45 amWell said!
No doubt the release schedule for new products is mostly complete for the next 18-24 months. So even if he were to not come back in June, you can bet the company will thrive for at least that long before the lack of Jobs’ insight on the details make have less influence.
And the people who make Jobs look like such a genius are still there. And will continue to be.
Not to mention the competition is so lacking in class or vision that it will take a long, long time for Apple to devolve to their level. I figure I’ll be retired by then (2025).
Posted by Eric Welch at January 15th, 2009 at 8:56 amI had this same conversation with a friend yesterday. It’s the yin-yang of Apple’s reality distortion field.
On the one hand, Jobs & Co have taught us to expect magic, and when they deliver (iPod, Mac, iPhone), it’s what we expect because there is no company like Apple.
Yet, when they merely execute, we hammer them because we expect magic.
It’s almost as if they’ve lost their premium for wizardry, which is ironic since isn’t the whole moral of the re-pricing of our financial markets about a return to quality (differentiated products, deep product pipeline, stellar management team, huge profits, massive cashflow)?
Who looks better against that template?
Mark
Posted by Mark Sigal at January 15th, 2009 at 10:04 am–
Read: Ringing Up Apple’s Earnings Call
http://thenetworkgarden.com/we.....-appl.html
go ahead and buy shares John, if you’re such a believer
Posted by Sam Harrison at January 15th, 2009 at 3:38 pmI think you’re confusing stock market performance with company sales performance. These are two completely different things. An Apple investor thinks completely differently to an Apple user, and the price of shares has nothing to do with long term brand performance.
Posted by Al Frost at January 16th, 2009 at 5:05 am