- Jan. 17 (Bloomberg) -- Apple Inc. Chief Executive Officer Steve Jobs took a leave of absence as his health deteriorates from battling a rare form of cancer and the liver transplant he had almost two years ago, according to a person with knowledge of the situation.
- Jobs has been unable to keep on weight as he undergoes treatment for his conditions, said the person, who requested anonymity because the matter is private. He took two previous leaves -- for cancer surgery in 2004 and the transplant in 2009.
- Chief Operating Officer Tim Cook will be responsible for the day-to-day operations, with Jobs continuing as CEO, Apple said today, citing an e-mail to employees from Jobs.
- “I love Apple so much and hope to be back as soon as I can,” Jobs, 55, said in the e-mail. Jobs said he will continue to “be involved in major strategic decisions for the company.”
- Jobs co-founded Apple in 1976 and after a brief ouster returned to the helm in 1997, transforming it from a computer- industry also-ran into the world’s largest technology company by market value. Apple’s iPod, iPhone and iPad became trendsetters in each of their markets. Today’s announcement pushed down Apple shares in Europe, and U.S. stock futures fell.
- The duration of the leave “is less important than what his involvement is in the next phase,” said Gene Munster, an analyst at Piper Jaffray Cos. in Minneapolis. If Jobs remains involved with strategic decisions as the company says, “that’s investors’ No. 1 priority,” Munster said. “They could care less if he’s involved in the day to day.”
- Stock Reaction
- Apple spokesman Steve Dowling declined to comment beyond the statement. The company will likely face questions about the leave during a conference call with analysts tomorrow after Apple reports first-quarter financial results.
- U.S. stock futures on the Nasdaq-100 Index, of which Apple comprises 21 percent, fell 1.3 percent in electronic trading as of 11:30 a.m. U.S. markets are closed today for a holiday. Apple shares slid 6.7 percent to 242.50 euros ($322.31) in Frankfurt.
- “If you’re a holder, you’re probably starting to think, ‘Maybe I should take some money off the table,’” said Greg Taylor, who helps oversee about $5 billion as a money manager at Aurion Capital Management in Toronto. “Maybe the risk-reward is more slightly skewed to the downside.’
- 2009 Transplant
- Jobs’s liver transplant took place at Methodist University Hospital in Memphis, Tennessee. The surgeon who performed the procedure, James Eason, is an expert in treating recurrences of a rare cancer Jobs said he had in 2004.
- The cancer, called neuroendocrine tumor, was discovered in Jobs’s pancreas. While the tumor is often slow-growing, it can spread to the liver where it can become life-threatening. Eason said at the time that he had replaced the livers of about 10 people with the rare cancer. Jobs hasn’t said whether his transplant was done to treat a recurrence of the tumor. Eason didn’t immediately return a call placed to his office today.
- Cook, 50, took over daily management for Jobs during his 2009 leave. Cook received total compensation of $59.1 million, including a special bonus and stock in recognition of “his outstanding performance” during that period.
- The company was criticized by some investors at the time for not disclosing Jobs’s health issues sooner.
- Cook’s Role
- “Apple missed an opportunity to hand the day-to-day responsibility to another executive” earlier on, with Jobs focusing on broader ideas and design while taking care of his health, Michael Obuchowski, chief investment officer at First Empire Asset Management in Hauppage, New York, said in an e- mail. “I am worried that the current decision to keep Steve Jobs as CEO is another mistake.”
- In 2004, Cook also filled in for Jobs while he recuperated from surgery for the tumor in his pancreas. After the treatment, Jobs looked thinner at events through 2008 and the company’s stock fluctuated amid speculation about his health.
- “I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011,” Jobs said in the e- mail to employees that was released today.
- Jobs disclosed he was taking time off on Jan. 14, 2009, and Apple announced he was back at work on June 29 that year. From Jan. 15 until his return, the shares rose 70 percent.
- “If you bought the stock on a pullback over Steve Jobs’s health in the past, you made money,” Piper Jaffray’s Munster said. “The history is that when Steve Jobs goes on leave, it’s a great buying opportunity.”
- Jobs, who co-founded Apple in 1976 at the age of 21, was ousted by the board in 1985. When he returned to the company in 1997, it had run up $1.86 billion in losses over two years. Apple was 90 days away bankruptcy, Jobs would later say. The company is now the second most valuable behind Exxon Mobil Corp.
- --With assistance from John Lauerman in Boston, Matthew Campbell in Paris and Matt Walcoff and Hugo Miller in Toronto. Editors: Lisa Wolfson, Kevin Miller
(source:businessweek.com)
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