April 22, 2013
Is Apple CEO Tim Cook Up For Replacement? Likely Not
Michael Harper for redOrbit.com — Your Universe Online
Shares of Apple stock (AAPL) are resting below $400 for the first time since late 2011. In the past six months the stock has been in a steady decline with a few feeble jumps here in there.The company will release the results of their most recent quarter tomorrow and, according to some analysts and investors, Apple executives are looking for a new CEO to replace Tim Cook. Cook was handpicked by the Late Steve Jobs to take over as CEO when he finally stepped away from the company days before he passed. Cook also acted as interim CEO when Jobs took leave of absence.
There are now two strong camps set up on either side of this issue with some investors calling for Cook´s job and other Apple pundits dismissing these rumors as ridiculous.
According to Forbes contributor Gene Marcial, some unnamed Wall Street sources are saying Apple is looking to replace Tim Cook after stock prices have fallen “nearly in half” since they reached their highest point ever in September.
Marcial claims there is chatter to remove Cook amongst other members of the executive team, but says he´s heard no word that the board plans to replace Cook. Marcial claims that even though Cook is rumored to get the boot, Wall Street remains mostly positive about the "House That Steve Built," even though their stock has fallen to a new 52-week low.
“The Street´s bullish stance is astonishing considering that some $290 billion of Apple´s market value has been wiped out in just six months,” writes Marcial in his Sunday article.
“Of the 37 analysts from major securities firms who follow Apple, none has downgraded the stock to a sell, according to available data from MSN.com. But 25 of them still recommend the stock as a “strong buy” and six others rate it as a “moderate buy.” Another six Apple watchers rate the stock as a hold.”
In another Forbes article, Ken Ham spoke with a money manager who believes Apple is still a solid performing company despite their tumbling stock price.
According to Eugene Groysman, APPL is a stock which became overinflated last year and is finally coming back to Earth. Groysman has been right about AAPL before, correctly predicting that shares could reach over $500 last year and even bought shares at $245 in 2010, saying he believed the iPad would help push stock to over $300.
“I did sell Apple, but not because I still don´t see an upside,” said Groysman in an interview with Ham. “It had become extremely over weighted and it was causing major oscillations in the overall portfolio. As this was happening outside of my control, I decided I needed to reduce its impact on the overall portfolio.”
Groysman later noted that the market has ignored three important facts about Apple as a company. First, the company doesn´t carry any debt, a feat which the money manager calls “incredible” for a company the size of Apple. The iPad maker also has a ROE (return on equity) of about 38 percent and has a shareholder value of more than $130 billion.
Groysman also believes new products such as the “iTV,” “iWatch,” and cheaper iPhone could also be a hit for Apple stock this year.
Phillip Elmer-Dewitt, Editor for Fortune and Apple expert has given his take on the “Cook Must Go” rumors and claims people like Marcial are “not friends of Apple” and do not have “the company´s best interests at heart.”
“Make no mistake, the people who want Tim Cook's head on a spike are not friends of Apple,” Elmer-Dewitt says in today´s article.
“As far as I know, he still has the deep respect of the analysts who know the company best and -- most important -- the confidence of the board of directors who granted a million restricted shares of Apple as an incentive for him to stick around for at least a decade.”
Elmer-Dewitt also points out that APPL is sharing higher today than it was when Cook first took over in 2011.