Steve Jobs to Take Medical Leave: What Will Happen to AAPL?
It’s been a long time since I traded AAPL, a stock that I think is overvalued, yet still “swallowable”, at the current price of around $350 (an all time high).
But now that Steve Jobs is about to take a medical leave, is the $350 price tag for this stock still justifiable? Let’s examine the following chart to see how the Jobs’ health affects AAPL’s price:
The chart above associates milestones to Steve Jobs’ Health Report:
1. June 9th, 2008: A common bug is the reason why Jobs looked thin (to be honest, he always looked thin to me, but then again, I did not start contemplating Jobs health until I started trading stocks) during a presentation. The stock dropped 7.5% within a week (from $185 to $172).
2. December 16th, 2008: Jobs won’t be delivering any speech during the MacWorld conference. Rumors and concerns about his health circulate over the Internet. The stock drops 15% (from $98 to $85).
3. January 14th, 2009: Jobs said he’s leaving day to day operation and appointing Tim Cook to replace him instead, who was coincidentally praised (hmmmm) about his outstanding performance for running Apple during Jobs’ absence less than a week ago (from today’s date). It seems that the media was preparing the market for another term of Jobs’ sick leave, and trying to do some damage control on the stock. Anyway, back then, the stock dropped almost 10% within a week.
4. June 29th, 2009: Jobs gets back to work at Apple after undergoing a successful surgery. Shares are virtually not affected.
5. September 9th, 2009: Jobs unveils the new iPod in his first public appearance. Shares rise 7.5% (from $172 to $185).
I think AAPL will drop this week, at least 10%, as a lot of sell on stop orders will be triggered. You will hear a lot of rumors and propaganda from both camps (AAPL shorts an longs), just read and analyze yourself. Bloomberg has started this by saying “During Jobs’ absence, shares have risen 66%”, insinuating that the company is better off without Jobs!
We know two things: 1) Bloomberg hates jobs and wishes him death, and 2) Bloomberg is currently long on AAPL. Just wait until they switch their position!
I suggest you just leave your position if Jobs dies, he is the heart of the company, not Cook, nor everyone else. That’s why I’m always afraid of trading AAPL, the whole company comes down to one person.