Apple 2.0

Covering the business that Steve Jobs built

Macworld fallout: Shares sink, analyst sounds warning

December 17, 2008: 12:11 PM ET

Oppenheimer noteSeveral analysts rushed out overnight updates after Apple's surprise announcement Tuesday that Steve Jobs won't be delivering his usual Macworld keynote next month. (See here.)

But Yair Reiner at Oppenheimer & Co. did something we've never seen before.

Not only did he downgrade Apple (AAPL) to "perform," or neutral, but he withheld his 12 - 18 month price target for the stock -- replacing it with a big NA -- until he gets some questions answered.

"Six months have passed since Jobs appeared at the Apple Developers Conferences looking drawn and unwell," Reiner wrote in a note to clients entitled "One Scare Too Many." "It's past time for Apple to either disclose the state of his health or elaborate a viable plan for eventually transferring power. Until such time, we can no longer continue to recommend Apple as a long-term investment."

Reiner isn't the only one unnerved by the Jobs news. Investors sent Apple shares down nearly 7%, to $88.95 a share, in midday trading Wednesday.

Reiner acknowledges that there could be many reasons for Jobs to pull out of what has been, for the past 10 years, an annual event.

"Maybe he's not feeling well, or maybe he just has nothing to say. Whatever the reason, the unexpected announcement has underscored the greatest risk to Apple's long-term success -- its dependence on Jobs' health and its apparent lack of a succession plan."

"It's not that I have any inside knowledge," he told Fortune. "The problem is the absence of any sense of what happens when he leaves."

"In that context, I don't know how I can continue to recommend the stock on a long-term basis."

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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