Maybe Things Were Not So Simple and Straightforward...

Apple seems to be providing a lot of grist for my mill lately.  I really don’t want to pick on Apple – I love their products.  This blog post is being written on one of four Macs my family owns, we have any number of iPods in the house and one of my kids even has an iPhone.  You would have to drag me kicking and screaming back into a Windows/PC environment.  Sadly, Apple, which is famous for its secretive corporate culture, looks as if it will have to be dragged kicking and screaming into good disclosure practices. 

Last week, I wrote about the situation at Apple with Steve jobs – see the post dated January 6, 2009, “The Weighty Issue at Apple”.  Earlier today, acknowledging that “my health-related issues are more complex than I originally thought” Steve Jobs announced that he was taking a medical leave of absence until the end of June 2009.  This announcement is the latest in a string of vague statements surrounding the health of the CEO of Apple.  First, there was the announcement in 1994 that he was “cured” of pancreatic cancer following a nine month period in which they concealed the fact that he was suffering from cancer.  Then four years later, following an appearance where he looked like death warmed over, a company spokesperson declared that he was suffering from “a common bug”.  Last week, following more rumors and a drop in the stock price, the story was that he was suffering from “a hormone imbalance” that was robbing his body of proteins, but we were assured that “”The remedy for this nutritional problem is relatively simple and straightforward…”  

If you are an Apple investor, you have to be really frustrated by all of this.  At this point you would think that Apple would have figured out that investors think the health of their CEO is very important to the future course of Apple (what a securities lawyer might call “material”).  Just look at what happens to the stock price every time there is a rumor about Steve Jobs’ health.  While I don’t like advocating looking in the rear view mirror to determine if something is material, plaintiffs’ lawyers do it all the time, so it’s a necessary evil.  The Apple statements thus far have only served to feed the continuance of rumors.  When I look at what they’ve said so far I come to the conclusion that they are either: 1. In denial, 2. Just don’t know, 3. Are staying relentlessly on message to protect the chairman, or, 4. Are doing what the Chairman wants in order to preserve a continuing stream of paychecks.  

I come back to what I wrote last week, which is that early and full disclosure, as distasteful and intrusive on the CEO’s privacy as it may be, is better for the company in the long run in terms of establishing and maintaining credibility.  So far, Apple’s credibility on this issue is extremely low.  So low in fact, that you might even say that it carries no weight.