Steve Jobs' Return: What Does It Mean for Apple and RIM Stock?

If Apple (AAPL) CEO Steve Jobs is coming back to work shortly, what does that mean for the stock? Inquiring minds will want to know, before the market opens.

Can only be good, right?!?!

If Mr. Jobs really is worth US$20 billion to Apple’s market cap. (see prior post “What’s bad for Apple seems to be a tonic for Research in Motion” January 15-09) as repeated by Henry Blodget last October, and Apple and Research In Motion (RIMM) seem to trade in sympathy more than they trade apart, can RIM shareholders look for a bounce on the news about Mr. Jobs’ health as well?

Or will the return of Mr. Jobs cause hedgies to trade out of RIM, for fear that Mr. Apple himself will be all full of piss-and-vinegar and looking to design an iPhone III. Just to prove that he’s still got it. Hmmm. What to do, what to do?

YTD, Apple’s up 68% while RIM is up 102%. Not the relative performance we normally expect.

While our favourite CEO is busy with the hunt for a hockey franchise, will Mr. Jobs’ return to his desk close the stock performance gap? Or just push RIM shares higher, too, as the industry’s de facto EPS multiples expand?

One a 1 and 5 year basis, Apple has outperformed RIM shares. On a 10 year review, RIM has returned more than double Apple’s stock performance. Over 20 years, RIM has outperformed Apple shares by 4x.

But, now what? Maybe just own both and not worry about who wins, since you win either way in that case.

Disclosure - I own RIM

Comments

[2speed:]

If Mr. Jobs is ready to come back as the buzz indicates, he has an opportunity to redefine and reduce his role to more conceptual and strategic, and let those who have been running things to take more credit. This will reduce the market's focus on him and more on the performance of the company. Some day he will leave permanently and AAPL should cook the frog, not scald it.

I technically own AAPL but I'm short Jun 130 calls, so I'm probably out.

Jun 05 08:26 AM

[ia100:]

RIMM was only listed on the TSX in 1998. 20 year comparisons with Apple make no sense.

Jun 05 09:51 AM

[ia100:]

RIM IPOed in 1998. 20 year comparisons with Apple is specious

Jun 05 09:53 AM

[Constable Odo:]

What's bad for Apple lifts RIM's share price and what's good for Apple lifts RIM's share price. RIM has a win-win situation going for it with only one retail store and two CEO's.

It doesn't matter how much reserve cash Apple has, how many retail stores opening, how much deferred revenue the iPhone pulls in or how many tens of thousands of apps in the App Store. RIM goes up higher each day seemingly buoyed by loyal investors that believe in a company loved by the enterprise is a better investment than a company that is considered an over-priced toy company.

I'm fairly certain that even if Apple were to strike a lucrative deal for selling iPhones in China through China Unicom, RIM's share price would go up even higher.

I'm only saying this is how it seems because, otherwise, I don't know what is constantly driving RIM's share price up faster percentage-wise than Apple's share price.

That being said, I own stock in both companies but many more times the amount in Apple than RIM.

Jun 05 11:29 AM

[Fremont Rea...:]

I want to see an iPhone with physical keyboard which will never happen with Jobs present.

Jun 05 12:07 PM

[raytaythemd:]

...it doesn't mean anything because Mr. Jobs probably isn't coming back to work...read between the article's lines..."Citing a series of anonymous sources..." -- ah, yes, the kind journalists and other rumor mongers love most..."sightings have been...few and far between" -- why?...because he hasn't gotten better...even Wozniak admits he HASN'T SEEN him BUT he SOUNDS "healthy"...but note that he HAD BEEN expected back in June but now that has been pushed back to July...however, given the patient's medical history, I'm inclined to believe either the sources are in denial or Apple is merely trying to prevent the truth from coming out until after the "developer's extravaganza" next week...Mr. Jobs has a terminal condition for which he underwent a paliative surgery -- the Whipple procedure...I seriously doubt Mr. Jobs will ever return to Apple...

Jun 06 08:11 AM

[cano by diane:]

what would you want something like that for


On Jun 05 12:07 PM Fremont Real Estate Realtor wrote:

> I want to see an iPhone with physical keyboard which will never happen
> with Jobs present.

Jun 06 04:25 PM

[ebschor:]

I think Jobs should focus his remaining days at Apple on training/introducing a successor. If he leaves with a trusted and familiar successor "in the wings" shareholders, and the market, will have a much easier time dealing with the news.

Jun 06 05:57 PM

[neutrino23:]

Steve's importance at Apple is often exaggerated, IMHO. Whether he is involved in some day-to-day decisions is not key. I think Steve brings two powerful things to Apple.

First, he brings in the best people he can find for the job. I'm constantly amazed at the number of managers who seem intimidated by hiring smart people.

Second, he defines the long term personality of the company. He sets the goals and the goals are centered on making great products. Profits are important and stock price is important but it seems that Steve feels that if you make an over-the-top great product then profits and stock price rises will follow.

This is opposed to companies like GM that had "the system". GM was run by accountants who managed by looking at the money. Look where it got them. I've run across companies like this where the accountants make too many management decisions. This kills any bold decisions. Everything becomes safe and moderate. This might be OK if you are making bubble wrap or cardboard boxes but is the kiss of death for a company like Apple.

As an investor in Apple I'm not worried if Steve is not involved day-to-day. If Steve comes in once a quarter and helps with a course correction that would be enough.

Finally, I don't think he has to train a successor. I do think he should try to codify his main ideas. Much as Jack Welch wrote books on management style Steve should try to do this for Apple. That would give management some philosophy to turn to when they need to make decisions.

Jun 07 03:44 AM

[dragon10:]

I think that all living forms have a "terminal condition".


On Jun 06 08:11 AM raytaythemd wrote:

> ...it doesn't mean anything because Mr. Jobs probably isn't coming
> back to work...read between the article's lines..."Citing a series
> of anonymous sources..." -- ah, yes, the kind journalists and other
> rumor mongers love most..."sightings have been...few and far between"
> -- why?...because he hasn't gotten better...even Wozniak admits he
> HASN'T SEEN him BUT he SOUNDS "healthy"...but note that he HAD BEEN
> expected back in June but now that has been pushed back to July...however,
> given the patient's medical history, I'm inclined to believe either
> the sources are in denial or Apple is merely trying to prevent the
> truth from coming out until after the "developer's extravaganza"
> next week...Mr. Jobs has a terminal condition for which he underwent
> a paliative surgery -- the Whipple procedure...I seriously doubt
> Mr. Jobs will ever return to Apple...

Jun 07 03:55 AM