Apple stock dipped as much as 7.39 percent Wednesday, stripping $24 billion from its market cap in after-hours trading, after its iconic leader Steve Jobs announced he was stepping down as CEO amid longstanding health concerns.
Under Jobs, whose vision is credited with delivering an unprecedented string of breakthrough products from the Apple II to the iPad, Apple had surged from near bankruptcy in the late 1990s to the most valuable company in the world this month, briefly topping Exxon Mobile. Along the way, it eclipsed long time rival Microsoft, and it most recent adversary, Google. It had closed the day at $376.18, up 0.69% from yesterday, before sliding on the news.
Analysts downplayed the drop, noting that Jobs was long expected to step away from the CEO role. “Frankly it removes an overhang. People didn’t know when this would happen or when the day would come. It’s probably the best outcome,” Michael Walker, Portfolio Manager for WP Stewart told Reuters.
Ultimately, Walker said, the market had already priced Jobs’ departure into the stock. On Jan. 17, he took a medical leave of absence — he’d previously been diagnosed with of a rare form of pancreatic cancer, and in 2009 underwent a liver transplant.
Still, the move brings to a close an era, capping one of the biggest business comebacks in history. Jobs was fired from the company he founded in 1985, then invited back to run it as it foundered on the brink of bankruptcy. In 1997, right after Jobs got his job back, Michael Dell was asked what would he do to fix it. He famously answered “I’d shut it down and give the money back to the shareholders.”
Since then, Apple’s success on the back of winning products from the iMac to the iPod, iPhone and iPad has become a business legend. At one point of the end of July the cash on hand available to Apple, or its liquidity, exceeded that of the U.S. Government. The guys at Cupertino could count on $76 billion in their wallet, whereas Washington couldn’t reach deeper in their pockets than $74 billion.
Now the question is how the company can continue its winning streak under new leadership. In his resignation letter, Jobs gave a strong recommendation for COO Tim Cook, a man known more for operational expertise than vision, to be appointed as his replacement. The board accepted the recommendation and appointed Cook as Jobs’ successor. Jobs will serve as chairman of the board.
“I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role,” Jobs wrote in a letter announcing his resignation.
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