Posted by: Arik Hesseldahl on July 22, 2008
After the earnings call last night I talked with a source who is close to Apple and who who has in the past proven very well informed on the concerns of Apple senior management. This source told me with near-certainty that Jobs’ cancer has not returned.
The concerns around his health have centered on two things: His thin appearance at the Worldwide Developer’s Conference, and published reports in Fortune that in late 2003 after he first learned he had cancer, word of his condition wasn’t disclosed to investors for nine months. Having consulted with two outside lawyers, the board of directors decided that it wasn’t under any obligation to disclose anything.
Apple has for the most part remained silent about the health of its CEO. When questions were raised about his appearance at WWDC, spokeswoman Katie Cotton said he had been suffering from a “common bug,” and I’m willing to take that at face value.
But having undergone surgery to remove an islet cell neuroendocrine tumor from his pancreas — which is by all accounts a major surgical procedure and which required him about a month to recuperate — even a “common bug” has the potential to affect Jobs’ appearance. I think this, more than anything else, is the source of the concern.
Clearly there is a lot of concern about the health of Apple’s CEO, mostly because he’s seen, quite correctly, as a unique quantity. But, as I said on Fox Business News this morning (video above), I think these concerns are overblown, and are born out of a hypersensitivity to any perceived threat to his tenure. Remember during the height of the stock options mess, there were fears, again overblown, that Jobs might face criminal charges which might have in turn led to him losing his job. These fears were proved unrealistic, and even at the time the most cynical of observers thought it unlikely it would come to such a point. But the fears were there, and for awhile stock price suffered a little.
The same thing is happening here. Idle, speculative and uninformed talk is feeding fear uncertainty and doubt, that is not worth serious consideration. Even so, given what’s publicly known about Jobs’ medical history, questions about the condition of his health are certainly fair to ask, and the ones who should be doing the asking are Apple’s outside directors, specifically its three-member compensation committee, to ask these questions on behalf of shareholders: William Campbell, Millard Drexler and former vice president Al Gore.
Since Jobs’ ability to do his job would logically be affected if his health took a turn for the worse, and since his role is unique at Apple and when compared to other CEOs in his peer group, that makes his health a material issue about which investors have a legitimate right to be concerned over the long term. The compensation committee has the right and the duty to ask Jobs directly if there is any reason, be it related to his health or for that matter anything else, that might cause him to be unable to do his job in the foreseeable future. It’s a reasonable and prudent question, and he has the duty to answer them honestly.
Once this conversation has taken place — behind closed doors — the board can and should say two things: First, that it has discussed health matters with the CEO; And second, presuming that this is the case, that it has no concerns about his ability to carry out his duties. That’s it.
Such a statement can be issued in the course of routine SEC filings, say the next 10Q or 10K. It wouldn’t violate the CEO’s privacy in any way, and it would go a long way toward eliminating this lingering shadow of health-related doubt that keeps cropping up every time Steve gets on a stage.
In the event that Steve’s answer is that there is a concern, it would fall to the board to weigh the situation and to determine what if anything should be disclosed, based on its potential for a material effect. If, for example, Jobs were to face being laid up for a month, that might reach the level of being material. A bad cold coupled with a loss of appetite, a few sick days, and the loss of a few pounds? Probably not material, and not worth getting worked up about.
Back in the 80's, my uncle became ill and had the Whipple Surgery, the same procedure Steve Jobs had and like Mr. Jobs, my uncle lost some weight. Why? In my uncle's case,his diet was limited and what food he ate often went right on through so I'm thinking there was less nutritional benefit than if he didn't have the procedure.
If this has also happened to Steve Jobs, it's not any wonder that he's lost some weight and appears thin. Then if this is complicated by a "common bug" that can cause all manner of upset, his thinness would indeed be of consequence.
So far, this sounds like folks tampering with the facts not in evidence. Since it directly affects the stock price and thus the company, can we assume that they're Apple/Mac bashers as well? I hope not.
Is it just me, or does anyone think the timing of the NY Post article raising the concerns about Jobs' health just before an earnings release was odd?
NY Post: "Apple's hedge fund investors are very worried," said a Wall Street source who has spoken with some of the company's stakeholders.
My guess is some of these concerned hedge fund "investors" were short AAPL.
Finally a well crafted article.
Only needed because of the speculation made by a uninformed moron pretending to be a writer at the New York Post.
Your thoughtful explanation of what has happened to Mr Jobs in 2003 and what could be happening now shows sensitivity to all aspects of this issue.
Too bad the New York Post "writer" couldn't bring themselves to do any homework or research before spouting off and sounding like a uninformed ignorant jackass working at the only newspaper that matches their obvious disdain for well researched, truthful and honest reporting.
Steve jobs has built a long-term culture at Apple, based around a focused business plan of excellence instead of mindless market share or market domination. Steve Jobs has spent decades surrounding himself and populating Apple with very talented like-minded talent that is experienced in doing things "the Apple way". Finally, Apple obviously has a long-term plan for the future, with a superior grasp of consumer wants and needs, and where the technological trends are going. Apple (forbid the thought) could continue for a long time without obvious notice of the absence of Steve's hand on the throttle.
Yet, analysts and Wall Street speculators are of course interested in any rumors that can be used for short-term speculation and manipulation of stocks. That's their thing.
But for long term investors, the Apple fundamentals are still there, and will be there for years after Steve might be gone. As a long-term investor, I continue to buy Apple and hold it...probably for my grandchildren. But then again, I am interested in investment...not speculation.
Have all of you forgotten about the 90's? Remember when Steve Jobs wasn't in charge? The products were crap. Apple tried to play the PC market. If Jobs had not come back to take the helm, AAPL would be a delisted stock at this point.
I purchased one of the first Fat Macs back in 1984. I had various macs on my desk until 1993 when I finally gave up and switched to a PC. I'm now back on a MacBook Pro.
Jobs turned Apple around. Apple is Jobs, and Jobs is Apple. I don't own any stock in Apple. I only use their products. If Apple loses Jobs (for whatever reason), I would seriously fear for the quality and vision of the company.
From a user of Apple's products, I am seriously concerned about Steve's health.
Of course, should stockholders be privy to his marriage issues? What if he suddenly were to get a divorce? (By my thinking, a divorce would be a very distracting issue for a guy like Steve). And yet I think that answer is quite clear, "off limits."
I get tired of all the speculation, thanks for a thoughtful piece.
I guess his whacky diet plan doesn't work.
In the world or FUD reports and the influence of the Blogosphere, it's no wonder over speculation happens to lots of people and big business. This is precisely what is controlling our outrageous oil prices over the past 2 years. Combine this with ill-advised and unverifiable "journalism" from a media source just 1 rung up the ladder from the National Enquirer (The New York Post) and there you have it.
Jobs does create the "cone of silence" around Apple and that's his choice. I have considerable money tied up in AAPL and I am very concerned about the company's future. But make no mistake, Apple continues to outperform every company in its field and those fields are expanding into new markets every few years. Steve Jobs is the most gifted CEO of our time and has already outlasted the genius of Bill Gates and the innovativeness of Dell and Waite (Gateway).
Wall Street carries far too much impact on a company's success. Check out Google and Microsoft's most recent quarterly earnings. Apple is in a class by itself, whether you use their brilliant technology or not. Wall Street and the throngs of Apple haters will do everything possible to over speculate and yes, even LIE, to pull this company down from what is without any doubt, the most remarkable comeback in the history of modern business.
I say, read the numbers, leave Jobs alone and get off the Demon of Death bandwagon. I'd be MUCh more concerned if I had Yahoo, Google or MS stock. You want Steve Ballmer running this company?
JeffG,
You can argue that "Apple is Jobs, and Jobs is Apple" and to some point you're right.
To say the products in the 90s and before going back to Scully were crap is true for two reasons. Scully and his immediate successors had no vision and were more infatuated with Apples profits(Think Gasse here) and they were riding the profit/cash flow horse.
OTOH,I'm sure some in todays technology industry have a sense of vision not far from SJ's and might fit in the Apple Culture well.
Still, it's not reason to panic and think that Chicken Little has arrived.
JeffG,
Indeed, Jobs is a huge part of Apple, but I think 21,000+ Apple employees would disagree that Jobs IS Apple, as would Jobs himself. Have you ever watched a keynote to the end, where he thanks everyone that worked on a product. He has them stand, to be noticed, if only for a moment. Jobs was and is important to Apple, but he is not the only driving force by any means.
As a thirty-year customer of Apple, I am not unduly concerned about the future of the company, with or without Steve Jobs. He will leave Apple again someday, but under very different circumstances than his first departure. This time, he has had the freedom to assemble his own team of executives, and establish an ideal succession plan. Apple will continue to produce visionary products, at least for a while, after Jobs retires.
No doubt over the next 3 months, someone will put steve jobs on a protein rich diet(pasta, meat, spuds) to bulk the poor boy up which will put these stupid rumours to bed once and for all.
maybe he could got and get himself pregnant?? that fixed nicole richie and angelino jolie didn't it?
Steve's operation was over 4 years ago. After 5 years, the rule of thumb is that the cancer is cured. Steve is close to 5 years. I strongly doubt his cancer has recurred, as time goes by, it's more and more unlikely to recur.
I find it sad that a CEO's health is only in question due to stock price. I understand the cause for concern but investors should also look at the reputation of Apple's Staff. This is a company that has been through a lot. I would like to believe that if there was a serious issue worth mentioning concerning Jobs, that he would bring that information forward. Even with out looking at the numbers (mentioned from the previous reader) everyone must see Apple for the solid company it is. I don't see any cause for concern here as far as stock price goes. The fact that some people are only worried about it because of someones health just sickens me. Anyone else share my same opinion?
It would be interesting to see an SEC investigation of certain hedge fund managers for crafting a stock manipulation scheme, namely AAPL.
i totally agree with this. but on the other hand you are quite afraid of heights
If what DCzar wrote is correct that Jobs had a whipple done then this is very serious. The Whipple procedure is NOT, I repeat NOT a minor procedure. It is a very complicated procedure which invloves removing part or all of the pancreas and stomach and parts of other digestive organs. (no time to go into the pathophys.-google it) Also, whipple has one of the lowest cure/prognosis post-op of all cancers. Very few doctors and hospitals perform the whipple procedure due to the nature of the procedure and outcome.
This article perfectly points out why Steve Jobs is indispensable to Apple; can you imagine if the charismatic Jobs were replaced by someone who writes like this?
Even worse, imagine this scenario: Gore replacing Jobs.
I thought Oppenheimer handled the question and gave the answer.
Steve's health is a private matter, and Steve has no plans to leave Apple. If he had to leave Apple due to health reasons wouldn't that be the other plan? Steve's fine, Apple's fine and with or without Steve, I think Apple has enough brilliant minds to continue the culture Steve started.
Just keep the Carbon Dioxide bottler employees selling hazardous chemicals and stay with the talent inside Apple this time. Hopefully the board won't appoint some 'friend of the board' to run the company this time!
JeffG,
You are so wrong that Apple products were 'crap' in the early 90's. You switched in 1993? To DOS? Get real! Why not stop trolling for awhile, and give it a break, OK?
If that doesn't work, please come up with a plausible story. Apple made some huge mistakes in the 90's (Newton, emate, etc...) but the Mac has always been the original GUI OS and a great alternative to Windows.
some of these comments are incredibly naive. steve jobs is consistently presented as the vision behind aapl. i am unaware of the aapl succession plan. if steve jobs were to take ill, aapl's stock would no doubt lose value. i would never consider myself an "investor" of a company that treated its stockholders in this manner. aapl's board should remedy this situation. hopefully jobs is healthy and remains in charge of aapl for years to come. but in the advent that this does not come to pass, aapl stockholders deserve better.
I think we AAPL shareholders can file a complaint with the SEC over the manipulation
of stock prices. After 3 years of this crap I
want to know who and how. I've little doubt
left that it is occuring.
Always when we have fall sick, definitely lose weight. As they say its a common bug, hope he'll recover from it soon.
as for as apple is concerned, it is a brand of class. Hence, apple stake holders need not worry.
Still, it makes one nervous that such a significant company teeters on the well-being of just one person.
As far as I'm concerned, an article plant such as the one in the New York Post, designed to manipulate opinion in order to favor someones short bet is a criminal act.
"does anyone think the timing of the NY Post article raising the concerns about Jobs' health just before an earnings release was odd?"
Not so much "odd", as "a blatant attempt to manipulate the share price".
Remember the history of the New York Post. It was founded by Alexander Hamilton, the traitor mercantilist, to be a propaganda instrument for Wall Street banks. They have a long history of making up stories from whole cloth to serve the purposes of unscrupulous financiers.
-jcr
Dude, I hope he pulls through OK, that can surely be a nasty fight.
JT
www.FIreMe.To/udi
I think JeffG's comment is deeply revealing. Truth is that "Apple is Jobs, and Jobs is Apple." I cannot even think of any other company that much CEO-dependent and this should be a serious concern for any AAPL shareholder, 'cause yes "Long life to Steve!" but he's still a human being after all...
Remember, Steve is a vegetarian. That, coupled with the Whipple resectioning of his digestive system yields the potential for serious malnutrition. I woudn't want Mr. Jobs to start gobbling down pizza and beer every day, but he might consider consulting a serious dietitian about this.
The fact that Apple did so miserably after Steve Jobs left is testimony to the mediocrity of professional management. Sam Walton revolutionized retail marketing with his Wal-Mart stores, but after he died, the people running them have managed them as badly as K-Mart and Ames. If Jobs were to die, we could look forward to the disintegration of the Apple way, just like when Carly Fiorina butchered Hewlett-Packard. HP's culture is no more.
Apple has hired a lot of competent people. When Steve leaves, these people will not only have a good notion of what Mr. Jobs would want, they'll have the talent to implement.
There's a lot of hysterical "Jobs is the only reason Apple is great" nonsense.
If Jonathan Ive were to leave Apple at the same time Steve Jobs left, then maybe I might be somewhat concerned. If Tim Cook were to leave as well, then someone might legitimately wonder. But what are the chances of such a perfect storm happening?
Zero.
What happened to Apple's stock has happened after every single report to stockholders for years. No matter how well Apple does, Wall Street goes into hysterics and the stock price drops.
If it weren't to drop, THEN I would be worried.
How do we know Apple is correct and Wall Street is not? It's easy.
Exhibit A: History
Exhibit B: The economy.
Honestly, with the growth Apple has delivered in such tough economic times, if anything, growth is clearly NOT the issue here. There are more important events to come we should be focusing on.
Regarding the origin of the story -- "tabloid" business journalism -- in a free press, there will always be those who exploit emotion to sell copy. Market unease and cancer both trigger emotional reactions. Easy money.
It will always fall to the reader to find substantive fact presented in the reporting, and failing to find it, to completely disregard the article and its writer.
I wonder if some competitors financed such kind of news. Might be Nokia due to Apple entering into their territory. They hae killed Motorola so Apple is their next focus.
What i know about these people, it might be the case. They feel good on others misery and are very nationalistic, willing to inflict anything on their enemy.
there is one undisputible fact -- Steve Jobs WILL die ... as we all will ... if Apple R&D & Marketing is primarily guided by Jobs, then his (inevitable) death will be problematic for Apple - how much will be the same as how long he will live - anybody's guess
LOL all the poor numties on this thread all victims of the SICK quasi - religious PR that Apple has used to palm its buggy products onto the ignorant, stupid + gullible so effectively. :D IRONICALLY its that same CULT PR that uses someone or something on which to focus group identity, belonging and belief (for Apple fanaticism thats Jobs)that will Finish Apple now that his TERMINAL cancer is back.
What none of the irrational fanatics here mention is that what share holder fear is Apples HISTORY of PROPAGANDA, DECEIT + Manipulation EVEN when Jobs had MAJOR LIFE risking surgery they remained silent WHEN even for a routine operation it is EXPECTED,MORAL + CUSTOMARY for a COMPANY to make an announcement about it. Apple puts itself + its PROFITS before ANYONE else IE the history of its morality is such that it would readily attempt to shaft shareholders for its survival if it thought it could get away with it with via SLY MANIPULATION + DECEIT.
NB JOBS DID NOT HAVE THE WHIPPLE PROCEDURE.That is MEDICALLY IGNORANT MISNOMER.As reported he had Neuroendocrine tumour of the pancreas (islet cell tumours). The ISLETS (of Langerhans) are located in the TAIL(DISTAL) of the PANCREAS . The WHIPPLE procedure is SPECIFICALLY for (EXOCRINE) cancers in the HEAD part of the pancreas.
http://apple20.blogs.fortune.cnn.com/2008/06/13/steve-jobs-life-after-the-whipple/
THEREFORE his weight loss had nothing to do with this or a BUG (the USUAL LIE from APPLE). He had an excess of the sugar metabolism hormone GLUCAGON from metastases (secondary cancer/regrowth caused by malignant cells from the original cancer ) site islet cells from his original cancer. Glucagonomas is the name of the cancer with symptoms including those of diabetes = severe weight loss.
So the shareholders fears were correct Apple was being deceitful and manipulative - COMPLETELY UNTRUSTWORTHY AS USUAL, Jobs has a serious terminal(couple of years) illness and WILL NEVER RETURN to APPLE again and be FAR too ill to even work from home.So Apple shares will CRASH + be worthless, their religious quasi cult /brainwashing PR will be destroyed and the company will wither away in the repugnant sea of IMMORAL SELFISH MANIPULATION it created for itself. *FLUSH*
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A blog on the daily doings of Apple and the many companies in its orbit, with insight and analysis by two longtime Apple-watchers BusinessWeek Senior Writer Peter Burrows and BusinessWeek.com Senior Technology Writer Arik Hesseldahl.
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