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’s chart for 9/28/2010
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.