Steve Jobs Medical Leave: Apple Stock Falls

This post was updated on Jan. 18, 2011.
Apple's stock (AAPL) plunged in early trading Tuesday, hours before its quarterly earnings report and a day after the announcement that Steve Jobs, Apple's chief executive and the man seen to be one and the same with Apple, is taking medical leave for the second time in two years. COO Tim Cook will run the company in Jobs' absence.

The unpleasant reaction to the Jobs news when the stock market reopened after the Martin Luther King holiday - it was down $13.06 at $335.42 - in part reflects its unfortunate timing, which suggests an air of crisis in the situation. Jobs's health had faded as an issue driving the stock. Indeed the stock has rallied so forcefully in the last two years that it seems as though nothing bad would happen to the company or Jobs ever again.

Henry Blodget, a renowned technology analyst and blogger, noted that the Apple announcement was distinctly downbeat, in contrast to the more hopeful one that accompanied his 2009 leave for pancreatic cancer.

Highlighting one sentence from Jobs's email to his staff - "I love Apple so much and hope to be back as soon as I can" - Blodget wrote, "In our opinion, those are not the words of someone taking a short leave who is confident he will be back at the company soon (or ever)."

Some may argue that Apple no longer depends on a single personality, even one belonging to someone like Steve Jobs, and has moved on from its days as a rebellious upstart nipping at the heels of much larger rivals. But if it has become a mature, mainstream technology company, why does it continue to be valued as though there were nowhere to go but up and that the extraordinary growth of the last decade could be preserved in perpetuity - the law of large numbers be damned?

Even before the Jobs announcement, some longtime Apple fans were starting to wonder publicly how fat the golden goose could get while still being able to soar above its rivals. The prospect of Apple entering a new, post-Jobs era may compel shareholders to start pondering that question urgently.

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