Steve Jobs Health - Evidence of Stock Manipulation?
Almost one month ago , the New York Post ran an article about the health of Steve Jobs just as Apple was set to announce its Q3 earnings. As a direct result, the issue came up during Apple's conference call and Apple's stock subsequently fell over 10% (compounded in part by low Q4 guidance from Apple).
Over the past few weeks, there has been a lot of debate regarding what obligation, if any, Steve Jobs has to release his personal medical information to shareholders. Rightly or wrongly, Steve Jobs health has become a factor which influences the price of Apple's shares. And given the timing of the NY Post article, and the lack of facts it presented, it makes one wonder about its timing.
Here are the facts:
In June of 2008, Steve Jobs spoke at the WWDC looking remarkably thinner than years past. Drudgereport.com subsequently took a photo of Jobs and plastered it on their website with a caption implying that Jobs was gravely ill. From there, numerous websites took the story and ran with it, and speculation ran wild. Was Steve Jobs dying? Did his cancer come back? Why was he so thin? The questions were inevitable, but over the next few weeks, medical experts came out and said that Jobs' weight loss is often a natural result of the treatments he endured in his battle against cancer. Specifically, one of the treatments received by Jobs is known as a Whipple, and one of its potential side effects, according to doctors, is the loss of between 5 and 10% of body mass. Crucially, however, the loss is not a sign of a worsening condition. Moreover, Jobs' condition might have also been compounded by his vegan diet.
So basically, Steve Jobs lost a significant amount of weight which fueled speculation regarding his physical condition. Eventually, these concerns were put to rest by those with viable medical explanations for Jobs' weight loss. Put simply, the health of Steve Jobs his was a dead story until the NY Post ran its article on Apple earnings day. Hmmm.
The NY Post article said that investors were worried over the well-being of Jobs and the effect it would have on Apple's financial future. But what caused investors to all of a sudden become worried over Jobs failing health when those concerns had already been put to rest? Curiously, the article had no factual basis for its assertions. Instead, it quoted an anonymous Wall Street source, and mentioned that Steve Jobs had been looking thin in and around June. Essentially, the NY Post article relayed the fact that Steve Jobs was looking thin in June (which was already known), and provided no new evidence that his health was still currently an issue, or a topic of contention. Nevertheless, the story gained traction online and became a topic of discussion at Apple's conference call. Apple, respecting the privacy of Steve Jobs, said that Jobs' health was a private matter and that Steve had no plans of leaving Apple. Apparently this wasn't good enough, and this was part of the reason why Apple's stock took a nose dive the next morning, falling over 16 points.
Considering the timing and lack of substance of the article, it wouldn't be absurd to think that someone was trying to manipulate Apple's volatile stock price. Whether intentional or not, this wouldn't be the first time that the internet was used to spread false information about Apple in order to manipulate its stock price.
In May of 2007, it was reported that the iPhone was experiencing some last minute production glitches, and that its launch would be pushed back from June to October. Supposedly, the information was gleamed from an internal Apple email, and when the news broke, Apple shares went tumbling, causing some investors to lose millions of dollars when the stock price hit automatic sellpoints, and giving others an attractive, yet artificial, buying opportunity. Eventually, the story was deemed to be a hoax and the email a forgery, but the damage had already been done. With millions upon millions of dollars in play, the motives behind such rumors must be examined, if not investigated by the SEC. Similarly, the timing and substance (or lack thereof) of the NY Post article might also suggest motives of stock manipulation. While this might all sound conspiratorial, stock manipulation via fake news is nothing new to Wall Street, and in today's age of instant news, is as easy and dangerous as ever, especially with a high profile company like Apple.
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