News that Apple founder and Chief Executive Steve Jobs was taking another medical leave sent Apple shares lower on foreign exchanges as the U.S. markets were closed in honor of Martin Luther King Day. Jobs made the announcement in an email to employees and later released to the public.
In part, the letter said Apple’s board of directors had granted Jobs a medical leave of absence so he could focus on his health. In the past two years Jobs has received a liver transplant and has battled pancreatic cancer. This latest announcement did not say whether the leave was tied to either of those health issues, but it has definitely raised enormous uncertainty over the future of Apple.
In fact, it was all most financial news television could talk about as one analyst after another gave his or her opinion on what might happen to the company if Jobs was no longer in charge.
While the email to employees emphasized that the 55-year-old Jobs would remain CEO, his longtime lieutenant and chief operating officer, Tim Cook, who ran Apple during Jobs’ last medical leave, would again run the company in his absence. In his email, Jobs said he will “be involved in major strategic decisions for the company." He also wrote "I love Apple so much and hope to be back as soon as I can" and said he and his family would deeply appreciate respect for their privacy.
Apple spokeswoman Katie Cotton refused to provide any further details. According to The Wall Street Journal, Jobs has had a number of medical related issues in the past seven years. He was diagnosed in 2004 with a rare type of pancreatic cancer called islet cell neuroendocrine tumor, which could be cured if surgery removed it promptly. But in 2008 he began exhibiting noticeable weight loss and questions intensified when he said he would skip the Macworld trade show in early 2009.
Jobs blamed a hormone imbalance for his weight issue in January 2009 but a week later went on medical leave blaming a "more complex" condition he didn't disclose. Apple didn't provide any explanation for that medical leave either, but a physician expert at the time said the type of cancer Mr. Jobs had commonly metastasizes in another organ, usually the liver, during a patient's lifetime. A Tennessee hospital later disclosed Mr. Jobs had received a liver transplant there.
William Chapman, transplantation chief at Washington University in St. Louis, told the Journal that he hasn't examined Mr. Jobs personally, but said there are two likely scenarios. The first is that there was a transplant-related problem, though Mr. Chapman said it would be unusual for that to happen a year and a half after the transplant. He said a more likely possibility would be that the neuroendocrine tumor metastasized again.
Jobs' leave raises uncertainty for Apple because he has been so closely tied with its success and with turning around the company that had floundered when he was forced out in 1985 by John Scully. Over the last year and a half, Jobs had been the only public face for Apple, making it evident that he was in charge of the direction of the company. Last year, a surging Apple stock Microsoft in market capitalization to become the world's most valuable tech company.
The Journal notes that Jobs did not attend a Verizon Wireless event announcing the iPhone was now available through the carrier. And he had been scheduled to announce a new digital publication for the iPad this week, but that event has been postponed.
According to the Journal, previously when Jobs began exhibiting weight loss and then went on leave, Apple shares went down 23.3% between June 6, 2008 and June 26, 2009. In a sign reminiscent of that period, Apple's share price fell 6.2% in trading in Frankfurt, Germany. And an analyst at Gleacher & Company, Brian Marshall, told the Journal that he expects Apple shares to fall when trading resumes Tuesday in the U.S.
Marshall added that the language and tone of the note from Jobs to Apple employees was less optimistic than previous ones. When the CEO sent a similar email to employees about his medical leave in 2009, he gave a time frame for return and said he looked forward to seeing them in the summer. This time, Jobs said only that he "hoped" to return.
