3. The Cook effect
Remember when Apple Inc. (NASDAQ:AAPL) CEO Steve Jobs told us that his latest gadget was pure magic — and nobody doubted him?
Jobs made a sales meeting out of every speaking engagement. When Steve spoke, Apple shares jumped. Walk out on stage, make an elegant and persuasive presentation, leave the stage, reap the rewards. That’s how you build an empire.
This week, current Apple CEO Tim Cook reminded us that it just doesn’t work that way anymore.
Apple shares are off to a terrible start in 2013, falling 19% while the S&P 500 has gained 6.5% so far. Cook is under fire from investors, analysts, and media outlets. Some, like hedge fund manager David Einhorn, have concrete ideas on how Apple could treat its shareholders better. Others just raise questions in search of an answer.
This week’s annual shareholder meeting gave Cook a stage to answer some of these questions, and to soothe the frayed nerves of his investors. Under Steve Jobs, the event would probably have smoothed over many of Apple’s flaws like butter on the ragged top of a hand-split English muffin. But Cook fumbled the PR opportunity, buttered side down.
Just look at Apple’s stock chart for this Wednesday and see if you can tell when Cook took the stage:
Source: Google Finance.
That’s right — the meeting started at noon Eastern time. A few minutes of voting and other pleasantries, and then Cook faced the audience around 12:30 PM. That’s exactly where the chart takes a downward turn.
Cook was clearly on the defensive here, telling everyone that Apple’s recent price performance hurts but that you should really focus on the long term. Sound advice for sure, but not what investors wanted to hear. Apple investors didn’t leave that meeting inspired about a great future, as they probably would have if Steve Jobs had been available to emcee the show. Huffington Post confirmed that share prices often drop when Cook holds court at public events. PC Magazine sized the Cook Effect in a range between -0.9% and -3.6% per event.
Maybe Cupertino should get a more charismatic executive to run these presentations. Does Sir Jonathan Ive have any spare time on his knighted hands?
There’s no doubt that Apple is at the center of technology’s largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool’s senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.
The article 3 of the Week’s Biggest Surprises originally appeared on Fool.com and is written by Anders Bylund.
Fool contributor Anders Bylund owns shares of Netflix and Google, but he holds no other position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+. The Motley Fool recommends Apple, Google, and Netflix and owns shares of Apple, Google, and Netflix.
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