Jobs Resigns Apple’s Stock Price Falls?

Ever since the iPhone became the must have gadget and was followed up by an even more impressive iPhone 2 and 3, people have been walking into my office declaring that they have bought Apple stock, or are going to buy Apple stock. The reasoning is almost always the same. The products that Apple makes will be amazing and unbeatable forever and, therefore, Apple stock will go up forever.

I’ve long since stopped trying to add anything to these conversations because Apple stock fanboys are no different than Apple computer fan boys. Everything Apple does is right and great and anyone who thinks differently is a brainwashed slave to the system.

The truth is that Apple stock has done phenomenally well and that it is not now, nor has it ever been a “bad” investment. However, as with all things related to personal finance, there is no such thing as a universally “good” investment. What makes an investment good or bad is how well it is suited to your specific situation and goals.

What Happens To Apple Stock Now That Jobs Has Resigned

The one thought that I had every time someone told me about their Apple investment plans was, “What happens when Steve Jobs leaves?” Much like those who invest in Berkshire Hathaway stock, people who invest in Apple are in some ways investing in Steve Jobs and then, his successor.

As analysts have pointed out, Apple’s product line is likely already very solid for the next few years. It takes time to design and bring a product to market, and many of Apple’s next things are already well down that timeline. However, the one thing that Steve Jobs gives Apple, and its stock, is a Get Out of Jail Free card. If Apple’s next iPhone or iPad dissapoints in any way, it will quickly be excused because everything else the company makes is awesome and because everyone knows that Steve Jobs will make the next one even better.

All of which brings us to the question. How much, if any, of all this carries over to the new CEO? If the iPhone 5 is amazing but the iPhone 6 is even minimally disappointing, does the panic begin? Does the stock crater? Do investors remember that this is still Steve Job’s pipeline for the next few years?

Just like at most times during the past few years, there is a lot of upside in Apple stock, but the downside could be very ugly.

Jobs Resigns Apple's Stock Price Falls? 1People I discuss these things with point out at how well Apple stock has done over the past decade, and they are not wrong, but that stock price depended at every step of the way on things going as well as they did. A similar stock chart for the future depends on the same level of execution.

Ironically, the answer we get tomorrow when the markets open will only be half an answer. Jobs is staying on as Chairman of the Board, regardless of how little or how much that role involves Jobs in Apple’s products in the future, investors are likely to assume that there will be plenty of Jobs magic in everything Apple makes and that will temper any stock movements. Still, Thursday should be interesting for whatever does or does not happen.

 

Update: No significant sell-off on new of Steve Jobs stepping down. We’ll see how long the, it’s just as good, feeling lasts. Either way, it seems Apple shareholders are comfortable with things as they are.

1 thought on “Jobs Resigns Apple’s Stock Price Falls?”

  1. In my opinion, what is really happened to Apple Stocks will only know after Apple introduce the new product (after the last iPad 2). If the selling is still phenomenal, the stocks price will regain its strong position.

    Reply

Leave a Comment