Apple – How can a share price tank when one man gets i-sick ?
When you look at Apple you see a highly successful, creative business, generating shareholder returns far superior to its major competitors – for example in terms of total shareholder returns Apple outperforms both Google and Microsoft by over 50 % and has done for many years. But, despite being a massive enterprise with a market capitalisation of just on $279 Billion, the share price gets the i-wobbles everytime its CEO Steve Jobs gets sick – surely a business this size cannot be so dependent upon one individual ?
We often assess risk in SME clients in terms of key person dependence and put strategies in place to reduce that risk ( and its effect on the valuation of the business ) but it seems Apple has been unable to resolve the issue completely ( at least to the satisfaction of the wider market ).
In AFRBoss , Emma Connors recently wrote ” Steve Jobs may well be one in a billion, but he is not immortal. The company’s share price has got the wobbles more than once when investors have become concerned about his health and the lack of a successor ( Jobs had a liver transplant in mid 2009 ) .”
Former Apple executive Steve Vamos ( now on the board of Telstra ) says “Today, Steve Jobs is Apple, the big question is whether Apple will be able to carry on without him “