Experts: Apple Disclosure 'Falls Short'

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No Legal Complaints on Jobs' Health

Shares of Apple slumped about 1.5%, to 137.37, on June 22, the first business day after the Journal's story—and the same day Apple reported early sales figures for the iPhone 3G S.

Legal obligations aside, Apple nevertheless has a responsibility to be more forthcoming with shareholders, says Steve Davis, senior fellow at Yale University's Millstein Center for Corporate Governance & Performance. "As long as Steve Jobs remains the CEO of Apple, he cannot necessarily claim the same degree of privacy as an ordinary citizen," Davis says. "Too much of Apple hinges on his leadership and too much shareholder value is at stake." Davis says investors are entitled to more information. "What we've received so far falls short of what's needed," he says. "These leaks don't constitute a reassuring and comprehensive briefing by the board of directors to the marketplace."

There's little evidence as yet that investors are up in arms over Apple's lack of disclosure about Jobs' health. Of the roughly 28 outstanding legal complaints disclosed by Apple in its most recent quarterly filing with the SEC, dated Mar. 28, none pertained to the health of the CEO, which has been an ongoing concern for shareholders since the first disclosure of his treatment for cancer in 2004.

Apple stock has risen by more than 75% since hitting a 52-week low on Jan. 20, days after Jobs disclosed he would take a six-month medical leave. Investors have had plenty of time to digest the circumstances of his health, even if the amount of information they have is less than complete. "There's a lot more to this company than Steve Jobs," says David Klaskin, chairman and chief investment officer at Oak Ridge Investments, a Chicago-based investment firm that owns about 282,000 Apple shares. "People should keep in mind that his health is certainly going to be an issue—more so than other 54-year-old CEOs—but [Apple has] held up well relative to the market and it's still very attractive over the long term."

Hesseldahl is a reporter for BusinessWeek.com.

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