Rumor That HP Wants Apple’s Tim Cook Gooses Stocks

| Apple Stock Watch

Shares in Apple Inc. dipped sharply in early morning trading, while HP’s stock jumped in almost a mirror image. The the catalyst for the actions appears to be a rumor that HP is looking to Apple COO Tim Cook to be its new CEO, a rumor Mr. Cook has reportedly denied.

In the charts below you can see Apple’s stock beginning the day almost US$17 down, more than a 5% decline, while HP’s stock climbed by more than $0.40, more than a 1% gain. It seems that investors see the hiring of Mr. Cook as a big win for HP and a big loss for Apple.

AAPL Chart

AAPL’s chart for 9/28/2010

HPQ Chart

HPQ’s chart for 9/28/2010

Mr. Cook is COO of Apple, and he has long been credited for making Apple’s inventory management world class, if not the best in the computing industry. Roger Kay of Endpoint Technologies Associates perhaps put it more succinctly in an interview with The Wall Street Journal where he said that Mr. Cook is “known for making the trains run on time.”

He was also the acting CEO of Apple when Steve Jobs took a medical leave of absence from the company in 2009. During that period, the company launched several new products, and it was perceived from the outside that Apple continued to run just fine with Mr. Cook at the helm.

Accordingly, it’s easy to understand why HP would want Mr. Cook. Who wouldn’t? He understands operations and has been working side by side with the best product guy on the planet for more than a decade.

As soon as it became clear that this rumor was at the heart of AAPL’s sharp decline, analysts came out of the woodwork to proclaim it was highly unlikely Mr. Cook would leave his spot as the number two guy at the most important tech company in the world to run HP, a very successful company, but not a company known for innovative products that routinely change the world.

Piper Jaffray analyst Gene Munster told The Journal, “Tim Cook is not going to leave Apple. He doesn’t need money. He is the second most powerful guy in technology after Steve Jobs. Tim Cook is motivated by changing the world and I think he wouldn’t feel the same way at HP.”

Brian Marshall of Gleacher & Co. added more definitively that Tim Cook told him directly that he’s not leaving Apple. He told Barron’s, “Tim Cook will not be going to HP, he loves Apple.”

For its part, Apple hasn’t commented on the rumors.

As of this writing, AAPL had regained most of the morning’s losses, and was trading at $287.70, down $3.464 (-1.19%), on heavy volume of 33.8 million shares trading hands. HPQ continued to trade higher at $41.60, up 0.340 (+0.82%) on moderate volume of 21.8 million shares trading hands.

*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.  

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Comments

Lee Dronick
Intruder

“It seems that investors see the hiring of Mr. Cook as a big win for HP and a big loss for HP.”

I think you mean a big loss for Apple.

Bryan Chaffin

I think you mean a big loss for Apple.

I did mean that! Sloppy editing on my part, but I corrected the article accordingly.

Thanks, Intruder. smile

geoduck

Late this afternoon it came out that Mr. Cook is not leaving Apple.
I suspect someone trying to push stock prices to make a short term profit.

warlock

They are not trying to be Apple, they want to be Apple, NEVER HAPPEN! as a company they are way too stodgy, they are incapable of great innovation as they have been playing follow the win leader too long.

mhikl

Would sort of be like a 400lb chick trying to emulate Paris Hilton. (no insult meant towards full figured women; Paris, on the other hand . . . )

Lee Dronick

trying to emulate Paris Hilton

We’ll aways have Paris

Apple is currently the 600 pound gorilla in the room, but if enough of their people get legally poached that could change. Whatever, as Geoduck pointed out, Mr cook is not leaving Apple.

Nemo

I can’t decide whether this was one of many manipulations of Apple’s stock price to illegally profit from a short term trade, such as a Short or Put, in Apple’s stock or whether HP was sending up a trial ballon to see it Mr. Cook, who is well known to love Apple and love being at Apple, would be interested.  Of course, it could be both of those things.

Bosco (Brad Hutchings)

I don’t know if he will take HP’s CEO job or not. But I know this. Today, Tim Cook is loved and respected by all the Mac people. If, er when, he leaves to take the HP job, the news sites and blogs and comments will be filled with underhanded slaps at Cookie. Here are some suggestions if you don’t want to look too obvious:

1. “Paul Shin Devine happened on his watch and right under his nose.”

2. “Playing second fiddle to Jobs was one thing, but he wasn’t going to be Bat Girl to Jonny Ive’s Robin.”

3. “I guess there were too many Cooks in the kitchen at Apple. Hay-Oh!”

Lancashire-Witch

Mr. Cook is COO of Apple, and he has long been credited for making Apple?s inventory management world class

Measuring the effectiveness of a Company’s inventory management processes can be done in many ways. Maybe the Apple Accounting department are very happy with the inventory valuations; maybe inventory turns are measured in hours and days, not weeks and months; maybe Apple and its suppliers have JIT and Lean techniques down to a fine art. Perhaps Mr Cook can get up-to-the-minute inventory positions at the touch of an iPad.
But when I walk into a store to buy an iPod Touch (or an iPad) and they don’t have any in stock - and no-one can tell me when they will be in stock; I’m not impressed. When I measure Apple’s inventory management it falls short.  So much for world class.

jfbiii

Good point, LW.

Good for Cook if he can score a bigger gig.

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