Shareholders revolt!! This could be your next Apple related headline. Cook's job at the helm could be short lived, as a dismissive approach of the stock's rapid decent will only further aggravate investors, and will spew over into consumer mindsets as less will choose the tainted brand moving forward. Think about it. We live in a world of consumer sentiment that is merciless. One week your brand might be a hero, but the following it could just as easily be a zero. Cook is on the path towards becoming a zero….just as Ballmer guided Microsoft when Gates stepped aside. I have had at least a dozen dialogues with high level asset managers over the past few weeks as Apple's tanking share price has captured headlines. The general consensus has rapidly shifted from "this is a technical sell-off as investors are selling to take advantage of lower tax tiers heading into 2013" to the new norm of "Steve Jobs was clearly the visionary behind Apple's products, and this brand will soon blend in with all others in the hardware industry as the company peaked with Steve's passing."
Red Alert to Apple Mgmt: do something quick, or else the dominos will continue to fall. It's a tough world we live in, and reality is a bitch as they say. Apple needs to address this sell-off, or it will get much worse. Clearly the company continues to sell good products…..they net billions every quarter, and are in the black. Investors don't care enough. The market is forward looking, and the brand is suddenly boring…or is it the leadership that is considered boring? Seriously, how can you sit on a stockpile of cash at a time like this? $140 billion??? Buy another company with vision if your leadership is unable to create it internally (yes, this is absolutely the case Mr. Cook….you are failing, and too slow to excite shareholders for today's market demands). Issue a special dividend to retain your loyal shareholders (you know, the folks that really own the company in the end….pay them out some of the cash that is sitting idle). Better yet, announce a massive stock buy-back if you think that the company is undervalued at this price (ie: make a bold statement)…..or do nothing, and the market will continue to view the stock/company as in dire straits and the sell-off will continue.
In the end, Apple has presented yet another perfect example of why investors like Warren Buffet have avoided the tech sector in general over the years. The leaders of these companies are unable to accept change, and unwilling to adapt quickly enough. Most CEO's are on the podium within a few hours of a major sell-off, re-assuring their investors that good things are happening for the company. Avoidance is not the answer….in fact, it never works. Avoidance is the equivalent of guilty admittance. Look at Lance Armstrong….how did that work out for him in the end?
In summation, the silence of Apple's leadership is the biggest concern that investors should have at this time about the company. This company has a recent past of printing money. Investors don't care. They are concerned about the future, and whether or not the company's performance and growth have peaked. This is the classic kid in the school yard scenario. Smart kid excels in the classroom, followed up by the bully that steps up and pushes him into the mud…. If the kid fights back, he/she will be viewed in the eyes of their peers as a hero….regardless of the outcome of the fight. It's the effort and grit that kids (and adults) are motivated by….ex: Obama's Hope campaign. If the kid cries in the mud or runs away, game over….multiple bullies line up for more fun at the kid's expense. Sometimes in life, if you have a pair (or a $140 billion cash stockpile), you gotta step up and sock that bully right in the jaw. If Apple goes this route, I would bet that the ceiling is shattered and the stock doubles by year end as the next rally finds its base here. If Cook hides in the shadows, the momentum of the sell-off will gain. This is a pivotal moment in Apple's post Steve Jobs history.
Mr. Cook: Are you man enough for this challenge? It's now time for you to create YOUR dynasty….before the market creates it for you, and investor's revolt!