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Monday
Aug292011

Steve Jobs’ Resignation at Apple

 

Written Commentary:

On Wednesday, Steve Jobs resigned as CEO of Apple Inc. (NASDAQ: AAPL). He said in his statement that the “day has come” when he can “no longer meet my duties and expectations as Apple’s CEO.” He has asked to remain an employee of Apple and serve as Chairman of the Board.

While we believe Jobs was certainly a visionary, he was most influential in 1985 and, again, in 1997 when he returned to Apple. Today, Apple is the second largest company in the world, so it is not likely he was working on the programming of Apple products. Steve Jobs is brand recognition. He defined the business, so he will be impossible to replace in that respect.  However, we believe that Apple’s business operations or product pipeline will in no way shape or form be harmed with his absence as CEO.

If he were to succumb to his health issues, we would expect the stock to drop temporarily. We believe a permanent absence would have no influence on the company’s product pipeline. It is likely that Apple has a 10-year strategy of products.

We are also tired of analysts downplaying new CEO Tim Cook, saying “he is not a visionary.” Cook has been the Chief Operating Officer since 2005, and has led the company during Jobs' past absences.

The overhang of Jobs’ health and his reduced role at the company has already affected the stock. The market priced Jobs’ eventual resignation months ago. The stock is trading for 13 times earnings. We feel the company is positioned to do well without Jobs.

Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.