Steve Jobs Health Drags Down Apple

Alexander Wissel, Editor in Chief, Investment U

Many Apple (AAPL) investors discovered in shock that Steve Jobs would be taking a five-month leave-of-absence to deal with his health problems. The stock is down over 5% in early Thursday trading.

In 2004 Jobs had surgery to fight off pancreatic cancer that involved removing part of the pancreas and intestines. Speculation on whether he will need to have the remainder of the pancreas removed right now is rampant. There are already announcements of lawsuits that Apple “misled” investors in its latest communications over Jobs health.

What’s amazing here is that some of these same investors seem to think that Jobs is the creative genius that all new Apple products and ideas come from. We’ve said it before, but apparently Apple would cease to exist without its Chief Executive “Guru” running the show. Anyone who’s run or worked in a large company knows that a CEO is only as good as the systems and people they have in place. Apple’s talented workforce drives the innovation and quality of their products.

Regardless of whether the “captain” is at the helm of the ship is immaterial – the rest of the company’s employees will pick up the slack. It’s why middle and upper management are so important – they actually run things on a day-to-day basis.

And while there are those out there who believe Steve Jobs has discovered a miracle weight-loss cure, the fact of the matter is that he is probably pretty sick. If he isn’t insured as an asset to Apple (and he might be for all we know), then his departure isn’t a material impact on the stock. If they haven’t protected (read: insured) against his loss from a business continuation standpoint, then shareholders can’t count him as a material asset to the company – no matter how important he is.

COO Tim Cook has been running the day-to-day operations of Apple for quite some time now, as he did the last time Jobs was sick. The stock did well the last time he was at the helm. Ultimately, for investors in Apple, it comes down to their performance and their outlook. If you feel both merit continued investment, that’s what you should be focusing on – not on whether the CEO is in the office today.

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