Apple (AAPL): Steve Jobs Is Fine

Concern about the health of Apple (AAPL) CEO and founder Steve Jobs has been mounting since his appearance to launch the iPhone 3G model. He was terribly thin. Earlier this week, the press raised the issue again and  when the company’s CFO said during the Apple earnings call that Jobs health was a "private matter," investors grew more restless.

Chris Whitmore, an analyst with Deutsche Bank, wrote that "while the topic is delicate, we believe the absence of a straightforward denial of health issues will increase speculation of a worst case scenario.", according to MarketWatch.

There are two sides to the disclosure issues about Jobs health and how SEC regulations could be interpreted, particularly because Apple is as close as a "one person" company as any large corporation in the world. There is a strong argument that the company does not have to disclose whether Jobs currently has cancer or not. He had successful treatment for pancreatic cancer in late 2003. If there has not been a previous denial that he is sick or any other misleading statement, Apple may not be obliged to say anything if Jobs has become ill again.

The other, more compelling argument, is that the Apple board is a collection of high-powered people whose reputations are important to them and their companies. Arthur Levinson, the CEO of Genentech (DNA) is on the board. So is Eric Schmidt of Google (GOOG), Andrea Jung of Avon (AVP), and Al Gore. The board has already faced uncomfortable issues about the privacy surrounding Jobs 2003 illness and later about stock options grant investigation which might have damaged the CEO’s ability to stay on as CEO.

With a group like this as the Apple board, it is extremely likely that they would do both the ethical thing, from the standpoint of shareholders, and the smartest and most conservative thing from a disclosure standpoint.

Apple has said nothing.  The board would not dodge the issue of Jobs health if he is ailing.

Jobs is fine, or, the Apple board has a problem.

Douglas A. McIntyre