Apple Stock Recovers From Initial Shock Of Steve Jobs Resignation
NEW YORK — Apple shareholders on Thursday appeared to be getting over the sudden resignation of Steve Jobs.
Apple Inc. shares fell $4.03, or about 1 percent, to $372.16 in midday trading, but the entire market was down by an equal amount as well. In extended trading Thursday evening, the fell more than 5 percent after Apple said Jobs would step down as CEO and hand the job to chief operating officer Tim Cook.
Jobs will stay on as chairman at Apple.
Even if the timing was a surprise, most industry analysts said Jobs' departure from the CEO post was always on the horizon because of ongoing health problems.
Peter Misek at Jefferies & Co. said it was a very positive sign that Jobs will assume the role of chairman. Misek had expected Jobs to depart completely from the company. As chairman, "Jobs will be able to continue to offer his insights and visions for the future of Apple."
The immediate sell-off of Apple for fear of an end to one of the industry's longest winning streaks was overdone, said Ovum analyst Jan Dawson.
"These fears appear relatively unfounded at least in the short-term," Dawson said.
The company is in capable hands with Cook, Dawson said, but he acknowledged that he doesn't have the charisma and vision of Jobs, which could hamper the company in years to come.
Richard Gardner at Citigroup recommended buying during any retreat in share price. Jobs laid a strong foundation for the company, and Gardner expects the company to gain market share for years.
"In our view, Tim (Cook) is a tough but well-regarded leader who will continue to hold Apple employees to an extremely high standard of performance," Gardner wrote.
With a market capitalization of $344 billion, Apple is the world's second-most valuable publicly traded company after Exxon Mobil Corp. This summer, Apple briefly dethroned Exxon for the first time ever.
In 2004, Jobs, now 56, underwent surgery for a rare but curable form of pancreatic cancer. Apple disclosed his illness only afterward.
Just four years later, speculation about Jobs' health ran rampant when it appeared he was losing a lot of weight. In September of that year, he appeared at an Apple event saying, "The reports of my death are greatly exaggerated," after Bloomberg News accidentally published, then retracted, an obituary that it had prepared in advance.
In 2009, Jobs said his severe weight loss was due to a treatable hormone imbalance and that he would continue to run Apple, only days later to backtrack and take a medical leave. He returned to work in mid-summer. Later it is learned that he received a liver transplant.
In January, Jobs announced a second medical leave, but did not say for how long. He did say, however, that he would still be involved in major decisions.
Jobs' decision to step down as CEO, however, is hitting companies that do business with Apple hard.
In Taiwan, shares of Apple's suppliers and contractors fell harder than Apple shares.
Hon Hai Precision Industry Co., also known as Foxconn, saw its shares fall 4.6 percent. The company assembles Apple's iPhones and iPads in an enormous factory town on the Chinese mainland.
Shares of Wintek Corp., which makes touch screens for Apple, fell 6.9 percent in Taiwanese trading. Shares of Cheng Uei Precision Industry Co., which makes headphone jacks and other connecting components, fell 4.3 percent.
Shares of Taiwanese Apple competitor HTC Corp. rose 1.4 percent, going against the market. Overall, the Taiwan market fell 1.2 percent.
In the U.S., shares of Google Inc., whose phone and tablet software competes with Apple's, rose $2.19, or 0.4 percent, at $525.48.
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PETER SVENSSON 08/25/11 01:15 PM ET Associated Press