Being part of the finance fraternity we appreciate the basic funda of how a company is different from a mom & pop store. And the first think to strike our mind on this will be the trade mark Solomon & Solomon case - which states that a company is separate from its members and the company goes on even if its CEO, CFO or any top brass quit the company. We may also remember this famous line which throws the importance of this case – “Men may come, Men may go, but the Company goes on forever”. Being a core finance guy I’ve never doubted this principle. But some recent news in the Wall Street has made me rethink.
There happens a tech expo in SF every year, MacWorld, in January where all major tech companies unveil their new products and this is considered the mother of all tech conferences. Steve Jobs, the most revered CEO of the most celebrated company Apple, delivers the keynote Address which is the most sought after speech in the tech world and has had the widest media coverage so far. There came a shocker from Apple’s desk on 18th Dec 2009 that Jobs would not be delivering the speech for the January 2009 event due to his health conditions, instead the company’s SVP Phil Schiller would take the spotlight. Wall Street, which is off late not new to bad news, brought Apple’s share price on its knees and the shares slumped and closed that day at $89.16, down $6.27 (6.6%). The market sent a strong signal stating how crucial Jobs was for Apple. There came another letter from the Steve Jobs himself on 5th Jan 2009 stating that he is facing some minor health problems due to some hormonal imbalance which is perfectly treatable. The letter also stated that he will continue to function as CEO of Apple for the times to come. Remember Wall Street is not deaf to good news either; the stock price skyrocketed by about 4% in yesterday’s trading.
All this brings me to rethink whether Solomon and Solomon still holds good. In case of Jobs he is consider having a larger than life celebrity status. Research houses across the Wall Street have started discussing on Apple without Steve Jobs and most of them paint a grim picture on that scenario.
My Bottomline: Jobs gave Apple the cult status and orchestrated the company from rags to riches. He re-joined the company in 1997 as CEO after being ousted by a boardroom coup in 1987. In 2004 he survived a pancreatic cancer which nearly brought him close to death. Jobs has been a phenomenal CEO all through.
But I still think Solomon Vs. Solomon Case will hold good. Though Apple will not be the same without Jobs but will still continue to innovate and retain its celebrity status. Apple, though has mainly been the result of craftwork of the Great craftsmen Mr.Jobs, also has the hands of other great innovators in the company. I’m pretty sure whatever the employees have learnt from the “Master” would be put to use once he’s no more with the company. So the overreaction by the market to the Jobs health is unwarranted.
Anyways long live Steve Jobs, long live Apple!Ramki
Photo Credits : Picture taken from Wall Street Journal