When Apple CEO Steve Jobs announced that he was temporarily stepping down for health reasons, he may have unintentionally set of a series of lawsuits against the company. Shareholders could see the announcement as a mismanagement of information and a cause for a stock price drop, according to Forbes.
While CEOs aren't typically required to divulge information about their personal health, Mr. Jobs may be seen differently because of his perceived involvement in the company's success. Any stock drop following his announcement could be seen by shareholders as a blow to the company.
Robert M. Daines, director of the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University, commented "From the defense bar's point of view, there's a suit every time there's a stock drop, basically."
John Coffee, the Adolf A. Berle professor of law at Columbia University, added "If you see the market significantly decline [on Thursday] it will suggest that his health and his status are material to the stock price. If there was a material misstatement and a significant market loss we can count on plaintiff lawyers testing that."
Apple's stock closed on Wednesday at US$85.33, but dropped in after hours trading some 7.1 percent. The company's stock has, however, started inching back up to hit $80.74 in pre-market trading. AAPL is currently down 4.59 (-5.38%) compared to its closing price on Wednesday.
So far, no lawsuits have been filed by shareholders over Mr. Jobs's health announcement.