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Saturday, June 20, 2009

Apple And Steve Jobs: Shame On You If The WSJ Report Is True

Jun 20 2009 6:10PM | Permalink |Comments (24) |

I about fell out of my chair this morning when I did my initial RSS feed download of the day and found out about the Wall Street Journal's claim that Steve Jobs had liver transplant surgery two months ago. I don't own Apple stock; as I've indicated before, and for journalistic ethics reasons, I've made no direct investments in the tech sector since joining EDN in January of 1997. But if I were an Apple shareholder, I'd be royally PO'd right about now.

On January 5, Apple published an 'open letter' from Steve Jobs in which the company's CEO blamed his obvious and longstanding weight loss on a 'hormonal imbalance'. Nine days later came another memo, this one more ominous in tone, wherein Jobs admitted that 'my health-related issues are more complex than I originally thought' and that he was taking a medical leave of absence until the end of June, temporarily handing over the day-to-day reins to Tim Cook.

Now this, five months-plus down the road. If indeed the surgery occurred as the WSJ claims, it was apparently successful, judging from Apple's only public comment on the matter. "Steve continues to look forward to returning at the end of June, and there's nothing further to say," per Apple spokeswoman Katie Cotton. Technically speaking, Apple may not have needed to disclose the surgery to shareholders, since Jobs was on leave at the time. And granted, the Apple train hasn't come off the rails since the CEO disappeared from view, though everything launched since then likely was already deep in the development pipeline at the time Jobs stepped away from the wheel.

But it seems to me that any company should keep its investors apprised of health situations this serious with its upper management, on leave or not. That goes doubly so for Apple, whose image (and therefore its rising and falling fortunes) is so heavily equated with those of its mercurial co-founder and CEO. I just can't believe that, no matter how paranoid and reticent Apple culture is in a general sense, its press and investor relations personnel (not to mention its board of directors) rationalized such secretive behavior.

Again, the WSJ report is not officially confirmed; we don't even know in what hospital the surgery took place. Over the next several days, we'll undoubtedly find out more, courtesy of a combination of intense research and loose-lipped 'anonymous sources'. For the sake of Apple's remaining reputation as an upstanding corporate entity (the mysterious saga of Jobs' health has been ongoing since 2004, after all, and don't get me started on the stock options debacle), I certainly hope that the WSJ report is off-base.

Followup: Nice to see Jobs explicitly quoted in Apple's latest press release; this hasn't happened since late January. Godspeed, Steve.

Reader Comments

at 6/20/2009 6:31:42 PM, WharfRatCT said:
HIPPA

Persons right to privacy

Unless you have liver cancer in your immediate household, I would not expect you to understand what Mr. Job is going through. It is a life shattering time, trust me. Personally I kudo Mr. Job in handling the situation as best he could at that moment.

- WharfRatCT

at 6/20/2009 6:59:20 PM, Brian Dipert said:
Dear WharfRatCT, I completely understand what you're saying, and don't misunderstand; I empathize with what Mr. Jobs and his family are going through. But he is not just any ordinary private individual. He is the CEO of a major, publicly traded U.S. company. And when he agreed to take on that role, he also gave up a substantial amount of privacy for himself (albeit NOT for his family) in exchange.

at 6/21/2009 9:33:59 AM, Getagrip said:
This article is truly repugnant. What kind of moral climate do we have when the hysterical behavior of the investment community, which reacts instantaneously, greedily or fearfully on every scrap of perceived "information," has supreme precedence over human decency? The CEO of a profitable company is not the same as Commander-in-Chief of the armed forces.

It is clear that Jobs has behaved responsibly in working to create a company that will flourish without him. Besides, it is well-known that he was diagnosed with pancreatic cancer several years ago. Cancer has a way of reappearing and eventually destroy its victims. One must assume Jobs won't be around forever, whatever the current state of his health. Apple stock has moved wildly and erratically many times due to those who want to make short-term profits. They are not investors. They are gamblers and only destabilize the market.

The Jobs family does not owe first allegiance to Wall Street's speculators. I say that as a stockholder, who bought AAPL based on fundamentals. I couldn't care less what the stock does from day to day. The company is good for the long term. Let the day traders run around like headless chickens, and let Steve Jobs deal with his health how he wants to.

at 6/22/2009 8:16:34 AM, William Albright said:
Hi Brian,
I wonder if you really thought about what you wrote before posting this. "What hospital the operation took place in?" Even if Steve's health was a matter that should involve stockholders, which I dispute, the question of which hospital sounds like something from a sleezy tabloid or the Oprah Winfrey show.

Think this through. Why do you think Steve should tell you or me which hospital he was in?

And regarding whether or not stockholders need to know when a member of management is having surgery, imagine how much more important it is for us to know everything about you. When we read your blogs, both technical and otherwise, what biases might you be operating under? What is your technical education and experience? Would you post your college grades here for us to consider? Would you post you annual job reviews?

When you post a blog either praising or criticizing a company and their products, what emotional factors should we consider play a role in your positions? Are you married? Divorced? Is/was the wife a stockholder in one of the companies you are writing about? You've stated that you don't own stock in tech companies, but are you Clintoning us? Could it be your parents hold the stock in their name for you? Shouldn't we know who they are and what stock they own? In fact you've never listed the stocks that you own, just made a vague disclaimer that you don't own tech stocks.

Or perhaps we just need to use the information we do have, research what we need, and use good judgement?

Best regards,
Bill

at 6/22/2009 9:23:22 AM, Brian Dipert said:
Dear William Albright, yes, I really thought about what I wrote before posting this, as I always do. There's no difference in my mind between a word that I write that appears in print and one that appears online; I am representing my employer in both cases, and I am putting my own reputation on the line in both cases as well. By the way, roughly 36 hours later, I still feel the same way I did. Re-read my earlier comments to WharfRatCT. Any publicly traded company (far from one like Apple, so closely linked to its CEO) owes its shareholders more than just a claim of a 'hormonal imbalance', followed by a nebulous statement that the situation is 'worse than originally thought', followed by five months of silence, if indeed Jobs' cancer had/has metastasized and he'd undergone a life-threatening organ transplant surgery. To clarify, I don't particularly care at which hospital Jobs' surgery supposedly took place...my point in mentioning this was solely to point out that the WSJ writeup is quite incomplete (you'll also note that there wasn't even an 'anonymous source' mentioned) thereby casting some degree of doubt as to its veracity. And finally, although I'm flattered by your comparison between Jobs and myself, humility does not allow me to accept it. However, in a sense you're right...when I accepted this highly visible position, I also consciously realized I'd be giving up a some degree of privacy in exchange versus someone in a different profession. To wit, I'm confident that in less than five minutes' time on Google or a similar service, you'd be able to put 2 and 2 together and ascertain my marital status; I've explicitly described my educational and employment backgrounds in past posts. Similarly, I'm both bemused and baffled at your claim that the statement 'I've made no direct investments in the tech sector since joining EDN in January of 1997' is at all vague; it seems quite definitive to me. Maybe you should instead be asking yourself why many OTHER journalists aren't equally definitive...and why...

at 6/22/2009 2:05:17 PM, Victor said:
Hi Brian,

It doesn't surprise me that Apple has been less than forthright about Steve Jobs. Apple seems to be what might be called the "Teflon tech company" for many years. If MS did half the things that Apple does all the time there wouldn't be enough ink in the presses to print the outrage that would flow from it. Where else in this business is there a monopoly (yes, it is) that is more agressive even than Intel towards other companies and even its own users. If I look up the word arrogance in the dictionary, I think one of the synonyms would be Apple.

AFA Steve Jobs, yes, he is a public figure, but he also has a right to privacy. Let him have his own lfe.

Also, if anyone is naive enough to believe that the day-to-day viablility of a company like Apple is dependent on one person, then they don't have any appreciation for how companies work. Sure, one person can set the tone and affect the morale, but come on, let's be realistic.

Why not spend your moral outrage on things that really matter like how American companies are offshoring the tech jobs and want H-1 visas just so they screw the people who are still here. Why are H-1B visas even allowed when there are many, many programmers and engineers in the US who can't get jobs? And oops, they might be 45 or 50 or whatever. They aren't senile. And they aren't stupid. They know what is going on even if the companies can fool the government into believing that there aren't qualified people stateside.

at 6/22/2009 2:07:49 PM, Eric J. said:
Get over it.

As a long time Apple shareholder I've no problem with how this was handled. Owning shares does not entitle one to invade the privacy of the management. I thought Apple and Jobs were as up-front and forthcoming as needed, I didn't feel that anything serious or significant was misrepresented.

If one wants to own and trade shares in public companies one has to be ready to interpret the signals intelligently, and I'd hope that a journalist would understand that sometimes it's necessary for a company to present information obliquely rather than directly. Clearly privacy matters were at play here, and that's understandable and respectable. It wasn't hard at all to see what was going on, and IMHO at no time did Apple withhold material information from shareholders.

Jobs went on medical leave, it was announced, they executed to the announcement (quite successfully) and Jobs appears to be returning as scheduled. Would that all public companies communicated as honestly and executed as faithfully as Apple has in this case.

at 6/22/2009 2:13:54 PM, chuck... said:
The convers of the issue is that frankly those who own Apple stock would have seen it tank and significantly so when the headlines blared "Job's on life support while liver transplant surgery proceeds". No, the media DOES NOT deserve to manipulate stock prices! Probably 80% of the current recession is due to too many mouths connected to too few brains... Free speech also carries with it the inherent responsibility to not "Shout FIRE" in a crouded theater when someone lights a match. Headlines sell, frequently at the cost of all of us. It is time the media started paying its' dues instead of seeking more and more publicity for itself.

at 6/22/2009 2:16:42 PM, Brian Dipert said:
Dear Victor, I 'tweeted' about offshoring just a few hours ago, in fact, and a Google search will reveal many past writeups from myself and my peers regarding H1-B issues...

at 6/22/2009 2:25:08 PM, Jim Kufis said:
Hey Brian, show some empathy for Steve. Until you personally have been confronted with a life threatening disease and removal of parts of your anatomy you have no idea how this effects ones mind and spirit. I have been there and you certainly need to be more considerate of Steve. I wish Steve good health and a long life.

PS: I am not an Apple share holder.

at 6/22/2009 2:38:10 PM, Brian Dipert said:
Dear Jim Kufis, "until you personally have been confronted with a life threatening disease"...what makes you think I haven't? Again, revisit my initial comment, the second one in this series. I have tremendous empathy for both Steve and his family and friends. But he's the CEO of a publicly traded company. We certainly don't need to know every little detail of his health and the various other aspects his life. But for someone in his position, personal and professional lives greatly blur. Investors (and Apple employees, for that matter) have a right to know at least a bit more than Apple's publicly disclosed.

at 6/22/2009 2:45:52 PM, Trent said:
A disgusting hysterical article. Is this column a tech equivalent of Jerry Springer show?

at 6/22/2009 3:06:06 PM, desert rat said:
Well, APPL is up 40% in the last 6 months, so no harm done. But, if APPL had gone down 40%, and the company/BOD did not inform its stockholders of Jobs medical condition, damage lawsuits could have been filed... in my opinion. Remember that he did announce his medical leave, but stayed out of the details of his condition. That could qualify as "adequate disclosure" to the stockholders and invalidate such lawsuits. It's clear that Jobs has a good management team in place...the company did not jump the tracks while he was absent. In fact, they did quite well....

This thread gets into the area of the personal right to privacy vs stockholder rights argument here. Brian seems to lean toward the rights of the stockholders. The lawyers have to figure that one out, not us engineers....

at 6/22/2009 3:07:01 PM, Jim Kufis said:
Brian. Don't defend a indefensible position.

at 6/22/2009 3:19:28 PM, Brian Dipert said:
Dear Jim Kufis, indefensible...in your opinion. I'm sensitive to the fact that as you revealed in your prior message, you've also 'been there' (congratulations on successfully 'coming out the other side'), and therefore you have strong feelings about the topic. With that said, however, don't be so arrogant as to assume that your perspective is the all-encompassing and definitive word.

at 6/22/2009 5:38:07 PM, tedd said:
Brian,

You "about fell out of my chair this morning" ?!
Don't you think that EDN has an obligation to disclose this to its readers/shareholders/investors? After all, clearly this impacts your ability to write coherently.
I demand to know what you had for breakfast this morning and who you're sleeping with.

at 6/22/2009 6:58:14 PM, Kamal Mohan said:
Brian, totally agree with you - seems that everyone had forgotten how this present financial crisis started.

at 6/22/2009 6:59:05 PM, Brian Dipert said:
Dear Tedd, for breakfast this morning, I had two cups of coffee, a bowl of Frosted Flakes, and a banana. And I sleep in the same room as my dog and two cats. Satisfied? ;-)

at 6/23/2009 1:13:42 AM, Martin said:
Hello all,

I usually never take part in such a discussion, but in this case...
I've nothing to do with Apple, have no stocks, so I think I can post a "neutral" comment on this matter.

I my opinion the shame is the disclosure of a defintely private matter by WSJ.
Which "failure" should have been made by Apple enabling a lawsuit? They posted "Our CEO will be absent until June for health reasons, our management team is prepared and will do the job" Point!
What other information do you need? I think it was clear that a CEO, how famous and important for the company he should be, will not take that kind of leave for a cold...
But the timeframe was told and now it seems, the timeframe will be met. So everything's ok.
Another question: Do you think, a company should inform you "Well, our CFO is HIV-positive now, maybe he has to leave in a few years, when AIDS will threat him" That is what you requested for!

Or would you like to know: "Our CEO is on leave 3 weeks for holidays with his family on a lonely island and his iPhone will stay at home..."

If that is what you request, you should rethink about the ethics of shareholder community and the real reasons for the economic crisis.

at 6/23/2009 6:49:23 AM, Kirk said:
Brian,
I have to say I’m disappointed in your choice of topic to write about. Normally I look forward to your technical expertise and approach to problems. This article is in my opinion beneath something you should write. I’ve seen previous articles where you got into a nasty exchange with someone else over your personal life. Yet you find it OK to engage in the same banter about someone else.

I truly hope this is a temporary lapse in judgment or a poor editors decision and not a true indication of your personal ethics.

at 6/23/2009 9:07:03 AM, Barney Jurica said:
This is simply a tough call. The other side of the coin is the investors should be pleased with the Apple crew's performance during Mr. Jobs' absence. There are two stages of successful management based on my experience: (1) You can't leave because everything will fall apart, (2) You begin to question your value because the people you've added and supported are exceeding expectations. Mr. Jobs never made it to stage two duing his first tenure and thus far it appears he has on his second time around the block. Congratulations to Mr. Jobs on a most valuable lesson learned plus kudos to the Apple crew.

at 6/23/2009 11:26:22 AM, DM said:
I take a different viewpoint, which is big deal. Steve Jobs has been struggling with cancer for the last several years, and progressively relied on Tim Cook more and more. And Apple has continued performing well during this time. So I think this has proven that Apple effectively has a succession plan that works, and I don't feel any urgent need to know about Steve Jobs beyond what the company is required to say by law.

I was annoyed by the "hormonal imbalance" statements earlier in the year, since they were so lame.

at 6/24/2009 8:16:18 PM, Brian Dipert said:
Dear Kirk, while it's unfortunate that you're disappointed, four days later I still fully stand by what I wrote. Again, I'll say it: Steve Jobs is the CEO of a publicly traded company (which is why, from privacy and other standpoints, I'd quite frankly never want to be the CEO of a publicly traded company). Argue the merits of the law (or the bigger-picture stock market), if you want, but the law is quite clear in this regard; the SEC requires that publicly traded companies report in a timely manner 'material facts' that may have a significant impact on the company's stock price (in order to prevent, for example, insider 'shorting' or other illegal trading activities). Life-threatening illness of this sort, which you may already realize has now been officially confirmed, is a 'material fact'. If you don't want to believe me, how about Warren Buffet? www.cultofmac.com/warren-buffet-piles-on-steve-jobs-about-secret-transplant/12177.

at 6/29/2009 7:09:54 AM, Pinballw said:
Brian, Good post. For all the people out there that forget that corporations are not "people", (although the law is a bit confused on that issue), but are RUN by people. The health of Apple's CEO IS material information. I own no individual Apple stock or Micro$oft for that matter. But I do follow the market trends of various companies including the big computer ones. If I was considering purchasing Apple stock I would want to know the the CEO had health issues weither on leave or not. Such is life in a public company!
Keep up the good work.

Brian's Brain

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