I woke up Saturday morning to the somewhat troubling news that Apple CEO Steve Jobs had undergone a liver transplant a couple of months ago. Obviously, if Mr. Jobs was ill, it isn’t troubling that he received the transplant, and I wish him well in his recovery. What did trouble me, and will likely trouble the Security and Exchange Commission, is that the public is only hearing about this two months later — post iPhone 3GS release, of course.
As you may be aware, the SEC is already looking into the Jobs health saga — specifically, what other Apple execs and board members have known about his health prior to his taking a leave of absense six months ago, amid speculation that he was indeed very ill. The line at the time from Apple was that Jobs had some health issues that were more complicated than originally believed and that he was going to take some time to recover before a late-June return to work. So they didn’t worry investors, Apple told the world Jobs would keep a watchful eye over the company, even in his absense.
For most companies, a leave of absense by the CEOs is barely worth a blip on the radar screen. But in Apple’s case, it is huge news. Few companies are as reliant on the well-being of their leadership. And, generally, any mention that Jobs is in ill health sends Apple stocks into free fall. Remember the faulty report a few months back that claimed Jobs had a heart attack? That report sent the stocks tumbling, just in time for some folks to scoop them up and make a pretty penny when the world learned it was a hoax.
Clearly Apple played Jobs’ health close to the breast in December, acting as if maybe Steve was just a tad tired and needed an extended vacation. Unfortunately, a liver transplant is not a vacation.
The Apple reality distortion field was working overtime on this story, very clearly in attempt to downplay Jobs’ very real health problems (one doctor said the liver is the next stop for cancer after the pancreas) and keep stock prices up. And when the news finally leaked that Jobs had a transplant, it wasn’t while he was on the table — it was two months later, when he’d had time to recover. It also broke late Friday night, after the markets had been closed and the new iPhone had hit stores, so there was no chance fear of Jobs’ health would deflate the stock prices.
Imagine what would have happened to Apple stock had Jobs announced he was going on leave to have a liver transplant. What if the Wall Street Journal broke the story the day before the transplant? What if the story had run Friday morning? The point is that any scenario other than exactly what did happen would have been awfully bad. Rarely do companies avoid such PR mishaps by mistake.
There’s a degree of deception going on at Apple that should have shareholders concerned. Sure, the PR team could be lauded for its ability to spin, but we aren’t talking about spin here; we’re talking about deception. The refusal to answer direct questions, the pointed accusations that the public is improperly meddling in Jobs’ personal affairs, the assertions that he’s fine and looking forward to resuming his work….all point to sins of ommission and commission. And because the company knows full well how strongly its stock price is tied to Jobs’ health, one must wonder what the company knew about Jobs, and whether it was intentionally misleading stockholders to keep prices up.
My prediction is that the SEC will be looking into this, to determine who knew what and when.
But in the meantime, take this as an example. If you’ve got bad news, hold onto it until it can be spun into a positive. Failing that, make sure it comes out on Friday night. Because nobody reads the news on Saturday. Except me.