Things Are Rocky At The Top

No corporation survives bad governance

Is this the digital future?

On 17 January this year, Steve Jobs announced he needed more medical treatment, and that he would be taking a leave of absence. I wish him a speedy and full recovery.

The announcement was very carefully timed. Wall Street was closed for Martin Luther King Day. This is a public holiday which falls every year on the third day in January.

There was a good reason for this timing. In March 2010, financial magazine Barron’s attempted to estimate Steve Job’s value to Apple, and came up with a figure of $25bn (£15.7bn). The company’s present capitalisation is $319.7bn, which means that Job’s abilities comprise 7.82% of the value of the company’s worth.

Meanwhile, Larry Page and Sergey Brin re-inserted themselves at the top of Google. And analysts continued to grumble that Steve Ballmer‘s presence at the top of Microsoft actually depresses the value of the stock. The most recent figure I have heard is by 20%.

All three companies – Apple, Google and Microsoft – are very dependent on high-profile personalities.

Possibly, this is the fault of the personalities, and, just as likely, it is the fault too of the Boards of Directors and of investors in allowing the situation in each company to develop to the point where the health of Jobs and Ballmer, or their continued presence at the top, significantly affects the value of the stock.

At some point this is going to have to be addressed.

I am not qualified to offer advice concerning the buying and selling of shares nor of any other form of investment so, if you’re of a nervous disposition, now is the time to look away. If I was an Apple shareholder, which I am not, I’d think seriously about the situation.

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