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New rumors on Jobs' health hurt Apple shares

December 31, 2008|Tom Petruno

Shares of Apple Inc. were on their way to a gain Tuesday when a website reported that Chief Executive Steve Jobs was in "rapidly declining" health.

The company's stock sank from about $88 to $84.72 within minutes of the report, which cited an anonymous source and was posted on the Gizmodo technology website. The shares then recouped about half of their loss to finish the trading session at $86.29, down 32 cents for the day.

The Apple co-founder, who is 53, was diagnosed with pancreatic cancer in 2003 but has said he was cured with surgery. As The Times reported Dec. 17, however, "Appearances over the summer, in which Jobs looked unusually thin and drawn, renewed questions about his health."

Rumors flared again this month after Apple said Jobs wouldn't deliver the keynote address at January's Macworld Conference & Expo, the venue the company has used for more than a decade to unveil products.

It makes sense that Jobs' health is an issue for Apple shareholders. But that also means there's an incentive for traders to take advantage of the situation, by spreading rumors, or playing them. However, Apple shares aren't heavily "shorted" by speculators who borrow stock and sell it in an effort to profit from a decline in the share price.

Apple has consistently declined to comment about Jobs' medical issues. It didn't change its policy Tuesday, telling Bloomberg News: "If ever Steve or the board of directors decide that Steve isn't able to do his job, I'm sure they'll let you know."

Apple shares are down 56% this year, significantly worse than the 42% drop in the Nasdaq composite index.

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tom.petruno@latimes.com

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