Apple Inc. (AAPL): Don’t Blame Tim Cook For The Fall

Most of the time, the CEO has to answer for a company’s cratering stock price. Investors clamor for accountability when things go bad, and typically a stock’s decline is the direct result of a deteriorating business. Dropping share prices should usually be commensurate with aforementioned fundamental deterioration, if there is any. That’s not always the case, though.

Back in 2011, when Netflix, Inc. (NASDAQ:NFLX) cratered from $300 to $60 over the span of four months, investors called for Reed Hastings’ head. Much of that drop was tied to the Qwikster debacle and associated 60% subscription price hike, but shares have recovered since then. Hastings has regained investor confidence primarily by focusing where it matters: domestic paid streaming subscribers were up 26% and international paid streaming subscribers soared 238% last year. It’s all water under the bridge now.

That’s why investors should stop trying to blame Tim Cook for Apple Inc. (NASDAQ:AAPL)‘s fall.

The fall guy
Over the weekend, Forbes contributor Gene Marcial posted an article that’s been making the rounds today speculating that Apple Inc. (NASDAQ:AAPL) is currently looking for a replacement CEO, citing “[s]ome Wall Street sources close to some Apple Inc. (NASDAQ:AAPL) executives.”

Marcial also said that some large investors “assert privately that it’s time for Apple Inc. (NASDAQ:AAPL) to oust Cook, under whose tenure Apple Inc. (NASDAQ:AAPL)’s stock has lost about half of its market value since October 2011, when he took over as CEO.” The latter part of statement is inaccurate on two levels: Shares are still up marginally from when he became CEO in August 2011 (this inaccuracy has since been acknowledged and removed by Forbes editorial).

AAPL data by YCharts.

What’s entirely true is that shares have given up nearly all of the envious gains that they had previously enjoyed under Cook’s leadership. However, amid a gut-wrenching decline and the search for answers, investors are losing sight of how to really assess Cook’s performance as Apple’s CEO.

Cook has delivered numerous records for shareholders. Both holiday quarters that he has presided over set all-time highs for all of Apple Inc. (NASDAQ:AAPL)’s most relevant performance metrics (other than share price).

In nearly every quarter, Cook has put up iPhone unit sales higher than anything Apple ever reported under Steve Jobs. iPad units under Cook have also soared to levels unseen under Jobs.

Source: SEC filings. Calendar quarters shown.