Steve Jobs Resigns: Apple Stock Tumbles In After-Hours Trading, Analysts Remain Optimistic

Apple's stock is tumbling in after-hours trading on news that Steve Jobs is resigning as head of the company. After closing at $376.18, Apple stock has fallen 5 percent to $357.02 as of 7:59ET, according to NASDAQ.

Jobs, who cited an inability to meet his "duties and expectations as Apple's CEO" as the reason for his stepping down after 14 years, continues to battle a form of pancreatic cancer more treatable than other forms of the disease.

He will replaced by Chief Operating Officer Tim Cook. Many analysts say Jobs, who was last year named "World's Most Valuable CEO" by Barron's, leaves a fundamentally-sound company able to survive without him at the helm.

"The real takeaway is not to underestimate the bench," Kevin Dede, an analyst at Brigantine Advisors, told Reuters. "He's got an amazing cast supporting the operation of the company."

Cook, who has served as COO since 2004, is "highly regarded" inside apple, Ashok Kumar, an analyst at Rodman & Renshaw LLC also told Reuters. "From a succession perspective they could not possibly identify a better candidate."

Cook has already served in the role of interim CEO multiple times over the course of Jobs' battle with cancer, and the effect on stock prices has been mixed. On January 17, when Apple's board of directors last granted Jobs a leave of absence, Apple's stock dipped 6.2 percent to $326.72 on January 21 from $348.48 on January 14, before again rising.

Still, even as stocks dropped, analysts expressed confidence in Cook's abilities to lead the company with Jobs.

"Cook has performed flawlessly in the past as AAPL's interim CEO," Gleacher's Brian Marshall said in January, according to Fortune. "[W]e expect he will become the full-time CEO of Apple this year with Jobs hopefully serving as a senior advisor."

Also in January, according to Fortune, Deutsche Bank's Chris Whitmore called Cook a "proven operator and very capable of managing Apple's day to day operations." He added: "We also believe Apple's product roadmap for the next 12 months is largely set and Cook (and team) will ensure crisp execution on that roadmap."

In January 2009, when Jobs first took a leave of absence, Apple was in the middle of recovering from a stock market collapse that caused the company's stock to drop by over 50 percent, according to Forbes. That time, Apple continued its steady recovery from the financial collapse in spite of Jobs' absence.

Comments

[blackreign]

10:36 AM on 08/26/2011

Wow, Perhaps now the Apple devices will evolve to a more open system. It sure would would be nice to support USB, expandable memory (without being forced to buy different models from Apple), user replaceable batteries, etc....

[dmsdzinr]

09:03 AM on 08/25/2011

And when THIS news settles in the stock will jump right back up.

[kcwookie]

09:00 AM on 08/25/2011

Apples new management model, "What would Steve do?" There will be no issues, does anyone really think that Steve won't be heavily involved? He has created a creative, innovative machine. As long as Apple doesn't get greedy and protects their ecosystem, they will be fine.

[blackreign]

10:37 AM on 08/26/2011

Too late, Apple is already greedy, with their bullish "litigate all competition" philosphy.

[johnnygoodwud]

08:29 AM on 08/25/2011

i have never owned anything 'apple' before. because of a need in my small bus. i purchased an Iphone, and two days ago the new Ipad 2. i must say, i was pretty impressed with both items, and they seems heads above the rest of the market. this coming from someone who was very content using his old 'razr'.

[JohnTheMac]

07:20 AM on 08/25/2011

As a departure gift, he is putting the stock on sale for you.
You know, like when it was under $85 just three years ago.
Did fear stop you then too?
That's ok, it holds back many lives. It helps keep you average.

Steve never operated out of fear.

[JohnTheMac]

01:00 PM on 08/25/2011

Marine1492 said (but it was deleted?):
marine1942 August 25, 2011 at 8:42am

You're half right Marine. It's ALWAYS easier to live in fear, and you get what you deserve.
As far as Obama causing fear, what was that? The way he extended tax cuts? Kept most of the finance guys in the Fed from Bush Days? Escalation of wars?
Hmmm... the funny thing is, if from day one ENOUGH people get the idea to live in fear because of what they heard on the radio or TV, you will get the SAME results as though that fear were true!
So, is our present economy the result of Obama, or the result of a sizable part of the population 'hunkered down', buying gold, guns, and ammo? Even the hosts on these radio stations warn us of how they have to "broadcast from underground, as a voice of reason and Conservative values". In reality, they're in multimillion dollar studios, not mom's basement! So you think they lie about other things?

[JohnTheMac]

01:04 PM on 08/25/2011

... I also notice WHATEVER Obama does, it's wrong. Such an easy formula!
Even vacations or tour buses get criticized.
He has this bus, that's criticized.
If he flew, the cost of Air Force One would be recited to us.
If he stayed at home, the story would be that "See? He's only comfortable among the Beltway folks, he doesn't want to visit the Heartland and real Americans!".
See? I swear I could have a Conservative Talk Radio Show, just criticize EVERTHING he does, throw around words like "Marxist" and "Socialist", and ta-da! You got a show!

[Michael Lindley]

07:08 AM on 08/25/2011

Sounds like AAPL is a buy!!! Anybody that sold their stock doesn't know the company. Steve remains as Chairman of the Board, meaning Cook will still report to him. Tim Cook is an outstanding manager, took the iPhone and iPad to where they are today. New Mac computers that will be revolutionary coming out this fall. Look for an all in one with no peripheral mouse or keyboard!!! And if you don't know that Apple is 8 - 10% of market share and 75% of profits in each of their sectors, than you are an emotional investor, not a smart investor. I'll be buying MORE AAPL today and making MORE money on it as it goes to $500 within 12 months.

[jgeurian21]

09:14 AM on 08/25/2011

"you are an emotional investor, not a smart investor."

Welcome to the stock market.

[The JillyBean]

10:06 PM on 08/25/2011

I miss the days when stocks were about raising capital. Now everybody's a trader. *sigh*

Although whoever took a long shot and shorted Apple may have made a few pesos yesterday.

[iam99]

05:25 AM on 08/25/2011

Mr. Jobs deserves to enjoy his time. It is all of our most precious resource.
We have to consider that for anybody running a huge corporation that the stressors in that egoistic rarefied atmosphere are beyond measure.

[ellen63]

03:19 AM on 08/25/2011

What saddens me is not the overnight tumble of Apple stock, but instead the apparent decline of Jobs's health. He is the apotheosis of talent, innovation and artistry. I hope he makes a recovery.

[Brock Heubusch]

02:22 AM on 08/25/2011

Short that AAPL!

[abhorson]

01:12 AM on 08/25/2011

damn it ... is the Iphone 5 gonna be late ?

[DRaymond]

01:09 AM on 08/25/2011

I am going to start from a pessimistic assumption:  If there was any chance of Steve being able to return as CEO he never would have resigned.  In addition previous rounds of chemotherapy, transplants, etc. did not cause him to want to leave.  So I am guessing his prognosis is dim.

So I have been trying to find an analogous situation and the best I have been able to come up with is 1966 when Disney Studios lost Walt Disney.  Like Apple Disney had huge revenues, a tremendously popular brand, the best creative talent in the world, and a backlog of products already in the works.  Disney, of course, has survived as a company, but the 1970's and early 80's were rough for it and for a while the term 'Disney Film' was starting to become a derisive term for a sappy anachronism disconnected from current tastes.  There were shakeups, feuds, and even a possible hostile takeover attempt.

Is all that automatically going to happen for Apple?  No.  Nothing is automatic.  But whatever happens it will or won't happen faster because the tech world of 2011 is a much faster place.

[Smitty2000]

01:07 AM on 08/25/2011

Another reason not to invest in the market. It's al based on idiot traders emotions. You might as well invest in how I will feel from day to day.

[mrjohnny212]

02:12 AM on 08/25/2011

You've pretty much hit the nail on the head there. Traders are like Lemmings, one goes off the cliff and the rest of the horde race each other to the front of the stampede. They had to go to school to learn this behavior, a mind is a terrible thing to waste.

[Dan Vasquez]

03:33 AM on 08/25/2011

Well look at what happened to Apple the last time Jobs left.

[Michael Lindley]

07:10 AM on 08/25/2011

The last time Jobs left, the remaining CEO's had never run anything in tech. John and Gil were HORRIBLE CEO's and couldn't shape ANYTHING new of any value. Tim Cook is ex-HP, knows the business and was instrumental in iPhone and iPad rollouts. There will be no bump in the Apple road.

[RonQSmith]

12:58 AM on 08/25/2011

Perhaps he had a twinge of conscience and decided to decline on a fourth black market pancreas?

Perhaps he realized that none of us are going to live forever?

Perhaps he decided to leave this world a better place than he found it OOPS too late already sucked the world dry and ate its marrow. Oh well maybe next go round he will achieve enlightenment. We can always hope.

[Smitty2000]

01:13 AM on 08/25/2011

1st fan RonQ!!!!

[MIIKE]

02:50 AM on 08/25/2011

Quite a while ago someone asked why Jobs should be given the fast track to a new liver. They said, "He's no better than the rest of us." Well, that's where your analysis falls apart. He IS better than the rest of us. What do you do? How many people do you employ? How many reality shattering, science enriching, new gadgets have you created? Most of us go through life like robots, eating, sleeping, having kids, dying - carbon copy lives of those around us (most want to feel unique and special, but we're not). Jobs is a completely different animal.

Jobs DID make the world a better place, you (and 99.9999% of the population) haven't. Job DID employ hoards of people, you (and 99.9999% of the population) haven't. He's lived a rich, epic life. You ... well, that doesn't have to be answered, does it?

[psb42]

09:09 AM on 08/25/2011

Apple make tablets, phones and computers, reality shattering? science enriching? Get a grip!

[The JillyBean]

10:18 PM on 08/25/2011

that's discounting what the potential of the other patients capacities were or are. A genius with the capacity to cure pancreatic cancer, but with little resources could have died while Jobs got a new liver. But we all have our iPhones now!

What does seem evident is that at least Jobs unlike Mickey Mantle did not destroy his liver with personal life choices. So at least the recipient was a productive person and made decent contributions.

[MichaelMcKLA]

12:49 AM on 08/25/2011

There goes the market cap. But I expect it will come back. There are a lot of seriously nervous investors out there.

[sailor422]

07:43 AM on 08/25/2011

The after and premarket dips were not as bad as i expected. This will be a buying opportunity, but it looks like it will not be all that dramatic. Job's exit, one way or another, was baked in.

[illusi0n]

12:29 AM on 08/25/2011

Just guessing here but didn't Steve Jobs just have health issues not to long back which many were guessing had something to do with cancer because of his sudden weight loss ? Thinking that this could be the reason for being unable to fullfill his duties as CEO. Hope this is not the case.

[Winedude]

12:53 AM on 08/25/2011

Steve has been aware of pancreatic cancer since 2004.

[Smitty2000]

01:15 AM on 08/25/2011

his transplants tho have been american and not chinese.

[illusi0n]

01:15 AM on 08/25/2011

Wow, I didn't know this. Thanks for the heads up>

[mandalay007]

06:59 AM on 08/25/2011

my, you are really on to the news quick like lightning you are, duh