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Jan 19 2011

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Steve Jobs AFK

By now, most people have heard of the upsetting news that Steve Jobs (CEO and co-founder of Apple) is taking a medical leave of absence. Many fear for the future of the company as Jobs is seen as the lead innovator for their products and a key influence over Apple’s stock price.

While the latter may be true, the first is certainly not. Apple has produced many brilliant products over the years (albeit, pricey brilliant) and I doubt it was all from one single person. Regardless of Jobs being present, Apple will continue churning out innovative products and continue to dominate the market. I was once told by a store clerk that Ipods were not MP3s, they were “Ipods”. That kind of dominance is something competitors would kill for. No worries people, Apple products will keep on rolling like total “ballers”.

The second point however, is certainly a worrying one. Shareholder pessimism is what I am talking about. Although Apple’s day-today operations are unchanged, speculation from media, people on the street, and general shareholders will obviously be pessimistic. Like it or not, the King has left and there is a hole in the kingdom. What happens when people worry? They sell sell and SELL! Simply from investors selling their shares, Apple’s stock price will drop as demand will be lower and pessimism will be higher (we all know those arrogant jerks on BNN that try to predict stock prices…and fail – they spread false pessimism or even worse, false optimism).

We need a more rational approach towards valuating Apple. In the short run, there is absolutely nothing different about the company and its hugely successful product line. In the long run, we have to look at what they are actually planning to release and the business behind those deals to really learn of the value of the company. The idea that a company is tied to a single person is just ridiculous. However, if enough people are abandoning ship, the company could collapse due to nothing more than shear speculation.

Hopefully, that won’t happen and hopefully, Steve Jobs will return soon.

Permanent link to this article: http://www.brokenfuse.com/2011/01/19/steve-jobs-medical-leave/

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