Investing in Apple in the Post Jobs Era
In the wake of Steve Jobs resignation there have already been questions raised about the future of Apple and new CEO Tim Cook. These questions have affected the company’s stock price but not as badly as most reporting on the issue would have you believe.
Apple’s stock had, indeed, dropped about 7% in after hours trading following the Jobs announcement and was tracking in the mid 350s after closing at 376.13. But over night that price rose again to 366.85 as smarter investors hung in.
You see Jobs leaving has very little affect on the company, it’s marketshare and profits for the forseeable a future. Smarter investors who had bought Apple’s stock in the last few years did so knowing that the company’s CEO was ill and his time with the company would be limited. A plan of succession would obviously be in place long before Jobs had to leave his post.
Likewise the company’s product pipeline, an area where Jobs was incredibly involved in considering his title of CEO, must be set for at least another two years. This has little to do with Jobs health but is a fact of corporate life. Though features may change the basic product line and new models are planned well in advance of their manufacture. The first Tim Cook products won’t come for at least two years. Possibly more.
Jobs staying on as Chairmain is something I that was likely done to make less savy investors feel more comfortable with the change in CEO. Though his day to day involvement will be minimized (and possibly not even exist) the fact that his name is still related to the company will appease some investors and a move that was probably designed to head off a market sell off.
So don’t believe commentators who talk down about Apple as an investment by citing that the stock is down about 5% from yesterday’s close. Apple is still going to be fine.
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