Today we receive the news that Steve Jobs is sick, again. After the news breaks, Apple stock gets a hit in Frankfurt, up to 8% down. Looking at the stock over the past few months and what analysts predicted, it represents quite a bullish scenario. There are price targets up to $450.00 out there. Not that Jobs’ sickness is a total surprise, he fights serious issues since 2004 and latest since his six month leave of absence in 2009, for a liver transplantation, the experts should be clear about his health. Beating cancer and going through liver transplantation is not dealing with a cold. We all should be aware of this, shouldn’t we?
So, are the bullish news a bet on his health, or are these serious analytical results of a company’s performance and near and mid term achievable results? Reading the news and looking at the market reaction overseas, it seems business facts are not the major driver here. Don’t get me wrong, I don’t want to downplay Jobs work, he is one of the best leaders in business. However, the last time he had to take a longer break, there was no business problem visible. Tim Cook did a good job without interrupting any business flow. Steve Jobs doesn’t appear to be so full of himself that he ignores his health problems and therefore believes he is the only one at Apple. I believe there is a clear strategy in business continuity on the table. While the analyst world might not be able to evaluate and consider Jobs issues, I am sure he and the company are more aware of the long known facts and planned accordingly.
Let’s see what happens tomorrow when the market opens again. We will also get a look at Apple’s results and my guess is, they will beat the forecast again. For the current quarter, Verizon is now selling Apple phones, the iPad is coming with some enhancements and a few other much anticipated newbie’s are in the pipeline. Besides that, looking at the competition doesn’t reveal any major “oh-so-groundbreaking” new arrivals. Yes, everyone is now playing, or tying to play, in the tablet and smart phone market, but that is no news either. While a target of $450.00 might be bullish, a cut of 8% because of Jobs’ health problems does not make more sense. Hopefully today’s news is just an opportunity to buy the stock with a little bonus.