Markets

Jobs Video: He and Apple Stock Look Distinctly Weak

By Conrad Aenlle

Updated on: February 22, 2011 / 12:26 PM EST / MoneyWatch

If a picture is worth a thousand words, what's the going rate on a video? If you're a shareholder in Apple (AAPL), the answer seems to be about $8.50 a share. That's how much the stock was down Tuesday morning after footage was released showing what appears to be a very frail Steve Jobs walking out of a shop in a suburban strip mall.

The stock market was broadly lower, so the decline in Apple might barely have been noticed if the video had not surfaced. (The clip is about 10 seconds' worth of Jobs getting into an ordinary-looking silver car with a not-so-ordinary-looking blond woman. An editor has expanded it into a ghoulish two-minute work showing the snippet over and over, in close-up and in slow motion, like a Silicon Valley version of the Zapruder film of President Kennedy's assassination.)

Leaving aside the market's doings, the poor health of Jobs, Apple's chief executive, is well known on Wall Street and in Silicon Valley. Apple announced in January that he was taking an extended medical leave. If the video is responsible for the decline in the stock, it could be the well known tendency - an irksome one for those who hew to the belief that markets are ruthlessly efficient, instantly factoring in all available information - of investors to think that something doesn't matter right up until the moment that it does.

Still, for Apple investors who have become accustomed to the stock never going down for more than a few moments at a time, the video provides a convenient excuse for the drop, which left Apple trading around $342, about $23 below the all-time high reached last week. But there is an alternative explanation that they probably would prefer to ignore.

Apple's stock has had a remarkable run that has taken it up to a value that reflects the company's considerable accomplishments and then gone way beyond that and perhaps way beyond what Apple is likely to achieve in years to come. Investors who are selling the stock may be worried that Apple's rivals have been playing catch-up quite successfully.

The iPhone was the miracle of the age three years ago but is now one of several types of smartphone that consumers and critics view as just as good, if not better. The same goes for the iPad and iPod and for the mechanism through which Apple sells content like music, video and apps for its devices.

The Jobs health issue is unique to Apple, but in many ways the company is starting to look like one member of a crowded club. The problem for shareholders is that the stock is still priced as if Apple were one of a kind and likely to stay that way forever.