How will Apple shares fare with Jobs' passing?

The consensus is that CEO Tim Cook is a winner and that the company has an enormously talented work force. But the stock historically has been volatile. One irony: Apple had only recently lost its position as the world's most valuable company.

By Charley Blaine Oct 5, 2011 10:36PM

Updated: 11:35 a.m. ET Thursday


Steve Jobs lived long enough to see Apple (AAPL) become the most valuable company in the world. But on the day he died, at age 56, exactly six weeks after resigning as the CEO of the company he co-founded, Apple was the second-most-valuable company in the world.

The stock was up 1.2% to $382.94 in morning trading Thursday. As of Wednesday's close, it sported a market capitalization of $350.7 billion. That's second only to that of Exxon Mobil (XOM), which rose 1.5% Wednesday, closing at $73.95. Its market cap was $359.4 billion.


Apple's market cap had been greater than Exxon's between Sept. 8 and Monday. On Tuesday, Exxon took the title back.

 

Jobs' death now raises the uncomfortable question: Was Apple's stock price all about Steve Jobs?

We won't know the long-term answer for some time.

Apple is a volatile stock. It has always been a volatile stock, and, between its hitting an all-time high of $422.86 on Sept. 20 and Wednesday, it dropped 10.6%. 

Exxon's change over the same time frame -- from the high on Sept. 20 through Wednesday's close: down 1.4%. The change for the Standard & Poor's 500 Index ($INX): was 4.8%. The Nasdaq-100 Index ($NDX) fell 4.9%. Apple represents about 12% of the index's value.

One big reason for Apple's volatility has been its popularity among hedge funds, whose managers in recent years have seen Apple as the one stock they had to own. That's great while the market is stable or rising. But when the market has fallen apart and hedge funds were forced to raise cash, they sold Apple.

At the end of 2007, Apple's shares briefly topped $200 and finished the year at $198.08. It never came close to that level in 2008 and did not bottom until Jan. 20, 2009 -- the day Barack Obama became president -- at $78.20. That was a decline of 60.5%. The Nasdaq's loss was 45%.

Apple by the numbers.History suggests that when a charismatic leader leaves a company -- for whatever reason -- the company loses its urgency, and the stock often suffers.

But the consensus since, say, last winter, when Jobs took a second medical leave of absence -- has been that the company is in great hands with Tim Cook, who became the acting CEO and permanent CEO on Aug. 24.

Cook may not have Jobs' flash, but his impact on Apple has been enormous. Cook is responsible for building Apple's production system, which relies on others to manufacture its products. At the same time, Apple's management ranks are so deep in talent that the company should transition into a world without Steve.

Moreover, between Aug. 24,when Cook became CEO, and its peak on Sept. 20, Apple's shares rose 9.9%. It's the market that's pulled Apple lower.

15Comments
Oct 6, 2011 8:51AM
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My condolences to Steve Job's family & friends as you were one on the true decent people in this world that revolutionized the computer industry.  You leave huge shoes to fill but I'm sure you prepared those under you to continue your ideas & work ethic.

 

As far as Wall Street's reaction...who cares!!!  All they are looking for on Wall Street is to manipulate money & put more in their greedy pockets & always looking for an excuse to justify their greed!  How about we respect the man who made them billions over the course of his brilliant career & let the man get the due respect he deserves before you start manipulating!!!

Oct 6, 2011 8:38AM
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Steve Jobs is one of the most brilliant men who walked the earth his legacy speaks for itself and if everyone in Apple follows his lead the company will do fine and thrive as it has in the past.

 

R.I.P Steve

Oct 6, 2011 10:29AM
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RIP Steve........Thank you for sharing your vision....
Oct 6, 2011 10:51AM
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Steve Job is a legend to the world, he contributed his talent not only to a new technology but also to economics, bring people's dream, create miracle, create jobs, a spirit pursuit perfect...he is a model to all people who has passion to do something change the world to next higher level...

 

A world can't depend on one person or few people, his passed left us a forever memory, positive influence to our decedents.  We respect all he has done to us to the world.   With our respect, with Apple team's efforts, Apple will continue break his record to next higher level.

 

We bought Apple stock, Apple products because we respect Steve's spirit   The whole Apple team respects our money, bring us good return.   We trust Steve, we also trust the whole Apple team.  In return, we will continue support the whole Apple team. 

 

Wall Street may have manipulate money, greedy pocket playing gamble on Apple's efforts.   It just shows two different types of investors, one invest and support; another speculate and pulling down.  I want to say: Apple team, we trust you.

Oct 6, 2011 11:49AM
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I'll give him credit...he figured out how to build a unique proprietary product in which all accessories had to come from them, was the most expensive and got people to love paying for it.  Pretty amazing.  Anybody selling a product would love to be able to do that!!  But as a techie and techno consumer I own zero Apple products...cost to much for what they do.  But that's just me.   Like i said, it's amazing what they have done!
Oct 6, 2011 6:58AM
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Jobs has been transitioning out of Apple since he first developed pancreatic cancer, and the entire world knew it whether they openly admitted it or not.  Apple's products will continue.  Apple's development and creativity will continue.  Only an insider(s) would know how many of Apple's "I's" Jobs is directly responsible for creating, even though he was the driving force behind the development and introductions.  Apple stock prices will fluctuate as those who base their thoughts on perception instead of fact react.  Once they settle down, Apple will continue it's climb.  I can assure you that there are many more inventive gadgets in the works and will be for years to come.  If Forest likes the fruit company, it must be a good thing.
Oct 6, 2011 9:27AM
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Impossible has a flexible boundary and so does the limits of mind. Who knows who is the next Avtar. Having said that, Steve was a rare gem of our human family.
Oct 6, 2011 2:05PM
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The rarity of Steve Jobs comes along perhaps every 100 years at best.  His influence for good across the globe cannot be overstated.  The combination of Mr. Jobs' imagination and discipline of intellect brought 200+ inventions (patents) to improve our lives with better gadgets and ways of accessing entertainment at affordable prices.  Thomas Edison was nearest comparable predecessor in the world of technological advancements.  Certainly Steve processed the genius to influence Apple's future for years to come.  Mr. Jobs will be missed dearly but his legacy and memory will live within Apple and mankind just as Mr. Edison has.  I feel blessed for having lived during Steve Jobs time on our Earth.  
Oct 6, 2011 9:07PM
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The company was riding too hard on Steve's "vision". I give Apple 2 years before they start tanking... things that are already in the works will continue and finish that he worked on, but after that, it will be a whole "different" company.  Steve was the company and with him gone, so will Apple's market share in lots of products. Android is already killing iOS, Windows Phone has been slated to take No 2 slot according to Gartner by 2015 (projected before Jobs passed, could be sooner now) and Windows 8 has a target painted on tablets/desktops/laptops that transitions seamlessly between the hardware spectrum yet gives you full capability of "computer". The stripped down consumption model of the iPad/Android Tablet doesn't make sense because it doesn't play nice with others and people want to be able to use a desktop/laptop and a tablet... why not have a tablet that is a laptop like MS originally designed.  On another note... How do all the iJunkies feel that a former Compaq (PC) executive is running Apple now?  Sounds like Apple isn't a "different" company after all...
Oct 6, 2011 6:16AM
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People who help people, in one way or another, will always be missed.  Steve Jobs was among them.  God Bless Them!

 

My friend below should know that Jesus Christ lives, just like Christianity and what makes it all possible. 

Oct 6, 2011 11:08AM
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@Re-TOG

 

Good point, but Christ came back to life so...

Oct 6, 2011 6:20AM
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POPS,

 

I can't believe you just compared Jobs with JC!

 

You Libs kill me...... 

Oct 6, 2011 12:29AM
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How has Apple been faring lately??

 

When Christ died, Christianity didn't.

 

But then again we are speaking of oranges and apples..........

Oct 6, 2011 12:12AM
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Time to load up on PUTS, people, the party's over. No more bobbing for Apples y'all! Make money going down, down, down...
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