Apple Out of a Jobs

That didn't last long.

Just 10 days after announcing that he had a "hormonal imbalance" that was robbing his body of protein, Apple (Nasdaq: AAPL  ) co-founder Steve Jobs on Wednesday said he plans to take medical leave till June. Tim Cook, Apple's COO, will assume day-to-day leadership of Apple in Jobs' absence, although Jobs will keep the title of CEO and remain involved in major strategic decisions.

You call that disclosure?
Investors, not surprisingly, sold on the news. They know Jobs is the creative force behind the iEmpire's products. He's more important to Apple than Michael Dell is to Dell (Nasdaq: DELL  ) , or Mark Hurd is to Hewlett-Packard (NYSE: HPQ  ) , or Steve Ballmer is to Microsoft (Nasdaq: MSFT  ) .

Even so, the sell-off -- shares of Apple are down 5% as of this writing -- looks somewhat overdone. Jobs isn't leaving the company, and his condition may not be as serious as some think.

The New York Times cites sources that say Jobs isn't suffering from a recurrence of pancreatic cancer but a condition that "was preventing his body from absorbing food." I've said before that his condition sounds like celiac disease and I still believe that. The medical definition of celiac disease:

A chronic hereditary intestinal disorder in which an inability to absorb the gliadin portion of gluten results in the gliadin triggering an immune response that damages the intestinal mucosa. [Emphasis added.]

There's no cure for the disease, but millions manage it by sticking to a gluten-free diet with the help of specialty stores like Whole Foods Market (Nasdaq: WFMI  ) . Whole Foods, in particular, has gluten-free shopping lists at each of its stores.

Of course, this is the best-case scenario, and thus far, investors aren't buying it. Can't say I blame them -- Jobs was as cagey as ever in his latest letter to employees:

Unfortunately, the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well. In addition, during the past week I have learned that my health-related issues are more complex than I originally thought.

More complex health issues? You call that disclosure?

Sorry, but we're officially past the point where ambiguity is acceptable. Apple isn't Apple without Jobs, and investors shouldn't have to guess about the severity of his condition. We need to know the chances of his temporary medical leave becoming permanent.

We wish you the best for a speedy recovery, Steve. But, please, stop teasing us with hints and innuendo. It's neither fair nor helpful.

More Jobs-related Foolishness:

Apple and Whole Foods Market are Stock Advisor selections. Dell and Microsoft are Inside Value picks. Try either of these Foolish services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers had stock and options positions in Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy has its eye on you.


Read/Post Comments (16) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 15, 2009, at 12:13 PM, rh33 wrote:

    Jobs and his doctors may not know what is wrong with him. What he is telling may be the best of what he knows.

    I believe the identity of his birth parents is known. Do any of his parents families have celiac disease?

  • Report this Comment On January 15, 2009, at 12:24 PM, pondee619 wrote:

    If his condition was not as serious as may be feared, he would come out and say so, directly, without contridiction in a few days. "Apple isn't Apple without Jobs". He knows this. The only reason for "hints and innuendo" is to hide his true condition. Otherwise, why the dance? I regret his lack of privacy in dealing with his medical condition. But, "Apple isn't Apple without Jobs", his investers deserve to know all that may affect their investment. Apple isn't Apple without Jobs, the medical condition of Jobs IS the current condition of Apple. When a material element is purposefully hidden from the investment community...

  • Report this Comment On January 15, 2009, at 12:37 PM, windozeluser wrote:

    The investors who sold off on this news were fanboy investors. Obsessive fanboys are convinced that Apple couldn't survive without him, and the other ~30,000 employees of Apple don't do anything important. Steve Jobs does everything personally, from writing all the software, designing all the hardware, and personally assembling each device himself. No one else has any input or influence on Apple's product line - not Phil Schiller, not Jonathan Ive, not Tim Cook, not Bertrand Serlet.

    Please.

    This Foolishness(tm) needs to stop. There are many talented people at Apple, and Steve isn't perfect. While he's lead Apple to greatness in his second term, he also nearly tore it apart from the inside near the end of his first term. From what I've seen, I think some things could get better without him at the helm. We won't know until the time comes, but fear-mongering and hit-whoring aren't helping anything, except the bottom-line of certain industry web sites.

  • Report this Comment On January 15, 2009, at 1:25 PM, Tokira wrote:

    Steve's "inability to utilize protein" could well be a simple protein deficiency, all too common among vegetarians, as he has been for several years.

    There has been much speculation among Doctors who are not treating him, and no mention of this very likely scenario.

  • Report this Comment On January 15, 2009, at 1:55 PM, celticspirit wrote:

    As an investor you need to assume the worst and hope for the best. Therefore assume Jobs is gone permanently. Does Apple collapse as a result? Not if the next CEO continues Jobs philosophy. Stop hoping for a return and see if Apple is still a great company without him - the jury will be out while the new CEO beds in and announces the next change in direction or next big thing. Then we'll really see what the future holds.

  • Report this Comment On January 15, 2009, at 4:29 PM, Mactivo wrote:

    People forget that Jobs is a true genius, Is he really that sick? Probably not, but it doesn't matter - here's why. The street in general and Apple haters and short sellers in particular have been puffing up the fallacy that Apple can't survive without Jobs. Of course it can, and will. (i.e.: Pixar anybody?) But the morons that sell on the rumor can't seem to understand that.

    The pressure on Jobs to publicly disclose very private matters such as his health is anathema to this very private man. So, why not just take a "leave of absence", (one where he is still involved in the company, no doubt as his letter to employees says), take the stock price hit now when its far below its true value anyway, and show the world that Apple can indeed survive on its own? This will go a long way to quieting the issue. Jobs gets his privacy back. Apple share price stabilizes at least as far as Job's heath rumors go. A true stroke of genius.

  • Report this Comment On January 15, 2009, at 5:22 PM, wuff3t wrote:

    Tim,

    This is the first time you have really disappointed me. I am sick to death of journalists on other sites (particularly Seeking Alpha) constantly speculating about Steve's health - little did I think I would ever find a TMF writer doing the same thing.

    You say you think it "sounds like" celiac disease - by which I presume you mean you think it IS celiac disease (this isn't quite the same thing so please correct me if I'm wrong as I may be doing you a disservice)? Are you a qualified MD and even if you are, are you really so good that you can diagnose a patient from distance in this way? If so you're in the wrong job as however much you earn at TMF I bet you could earn more as the world's greatest MD.

    You go on to take issue with the statement: "More complex health issues? You call that disclosure?"

    Well, yes - if the condition remains undiagnosed, it is (of course even Jobs might not have access to medical diagnosticians of your own, apparently psychic ability). Perhaps he knows more but wouldn't it be an even greater "crime" if he were to try to disclose information about his condition if the diagnosis really isn't certain yet?

    "Apple isn't Apple without Jobs"

    Maybe, and maybe not. Maybe after the "second coming" and everything Jobs did to resurrect AAPL after its near-bankruptcy others within the company have learned lessons too. Maybe AAPL will still be around in 50 years time - who knows? TMF are always teaching us about the value of patience, so let's just wait and see what happens over the next six months, shall we?

  • Report this Comment On January 15, 2009, at 9:26 PM, DBrown7 wrote:

    "Apple isn't Apple without Jobs"

    Yep, and I bet that $25 billion of cash on the balance sheet and $8.5 billion of free cash flow just vaporizes without him.

    Excuse me for refering to financials on an investment sight.

  • Report this Comment On January 15, 2009, at 10:20 PM, JTKASBEN wrote:

    My darlin wife has celiacs.. it can be "corrected" bya huge change in diet.. .but becomes"routine" after one learns of all the great foods available that do not contains wheat, barley or rye... there are support groups everywhere... jtk in Asheville

  • Report this Comment On January 16, 2009, at 2:18 AM, DLSTL wrote:

    Just take the time to look up Steve Jobs' surgical procedure which relieved his form of pancreatic cancer. He had the "Whipple" procedure which removed parts of the pancreas, gallbladder bile duct and resected the small intestine. The procedure in itself has the side effect of weight loss. His weight loss and other digestive hormone imbalances are the result of the Whipple procedure.

  • Report this Comment On January 16, 2009, at 6:16 AM, Babble100 wrote:

    Steve ain't sayin' much, but all you have to do is look at the photos of him to realize something is seriously wrong, and has been for a year. If his doctors haven't been able to solve it in a year's time, or even effectively diagnose it, that further tells us something.

  • Report this Comment On January 16, 2009, at 6:27 AM, citation5pilot wrote:

    Tim, I can't believe how The Motley Fool is a perpetuator of rumors about Steve's health. Just like a previous writer, Apple has a hell of a balance sheet with very talented people that helped get it to that point. How about dropping all the bull and dealing with the facts. I 'm beginning to see that my subscription to this gossip column may also fade into the background.

  • Report this Comment On January 16, 2009, at 7:35 AM, TMFMileHigh wrote:

    'Morning all,

    Thanks very much to all for your comments. We don't improve without criticism and I'm happy have to it. Some further thoughts:

    ON SPECULATING ABOUT STEVE'S HEALTH. I understand the frustration and I may very well be wrong in my assertions. But we've been left with an information vacuum and Steve's health really *is* critical to Apple. Certainly I won't argue that extraordinary talent exists there -- we all know the track record. Nor would I debate the financials. Fools who've been following my Apple coverage here understand how important I think Apple's cash cushion is:

    http://www.fool.com/investing/general/2009/01/05/where-apple...

    http://www.fool.com/investing/general/2008/11/28/bargain-sto...

    But I'm also a student of history and I know that, during the majority of its years without Jobs, Apple lagged. For the record, those years were mid-1985 to late 1996. (Though Jobs wasn't Apple's CEO in its early days -- his apex was as head of the Mac division.)

    So, even with the talent and the cash, I still believe it's fair to say Apple isn't Apple without Jobs. That doesn't mean it can't be successful without him -- it just means that, according to history, it never really has been.

    ON DISCLOSURE: I sympathize with Steve's plight, I really do. Not only is he sick but he has to deal with nutcases like me who need more information about the severity of his condition. It's entirely unfair.

    Except that isn't.

    Apple has so much of its brand equity invested in Jobs that his health is germane to the investing thesis for the stock. We therefore have a right to know, if not the details, the potential for his condition to worsen.

    We now know there's more information available -- Jobs said so in his letter to employees when he called his ailment "more complex than originally thought." I hate asking for this, but I think it's absolutely correct for Tim Cook, on the next earnings call, to give an update on Steve's health and assess the odds he'll return by June as planned or instead retire from the company.

    FWIW and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On January 16, 2009, at 2:12 PM, lmgava wrote:

    " I think it's absolutely correct for Tim Cook, on the next earnings call, to give an update on Steve's health and assess the odds he'll return by June as planned or instead retire from the company."

    I agree but you too know, REALLY KNOW, this is not going to happen.

    I don't feel it, I really KNOW it with every fiber of my being.

    It won't happen.

  • Report this Comment On January 16, 2009, at 7:05 PM, bougnoul wrote:

    Heck: nobody should be required to disclose private matters.

    If not happy, do not invest in AAPL.

    There are lot others where you can lose you dough.

    What's wrong with this picture?

  • Report this Comment On February 26, 2009, at 7:43 PM, steven107 wrote:

    If Tim wants to remotely diagnose me, i'm ok with that. I don't know what he charges, but my docs haven't made an effort. I've lost 70lbs in half a year, and went from 40% body fat to 13%. Best I can get a doctor to do is charge me some money, tell me he will run 'a' test, send me home and tell me he will see me again in a month or two. The last doc I seen, I got to do a catscan, he said thats interesting your liver has lesions, ran a blood test and said at least it aint cancer, lets do this again in 3 months. goodbye. pay the lady on the way out.

    On the bright side, theres some old pairs of bluejeans I got out of the closet that I haven't worn in 15 years that fit now.

    I hope Job's has brighter people, a little more interested in his well-being, and if he does and he is reading this, please send them my way when you are done with them :)

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