The Blog Of The Securities Industry Professional Association

Did Tim Cook Just Do That?




Yesterday was a tense day on Wall Street.  The Asian stock markets had just collapsed and US exchanges were poised for some of the biggest declines in years.  The futures market indicated that a collapse of at least 600 points for the dow jones industrial average.  As I stared into the CNBC screen and drank my coffee i was shocked to listen to none other than Jim Cramer of CNBC come on the air and read aloud a email he received from Apple CEO Tim Cook.  As you may know, Mr. Cook is on the hot seat as of late with his company starting to lag behind its competitors and a stock that has fallen 20% so far this year.    Its been a tough stretch for this tech darling of a company since Steve Jobs passed away.  The Apple convention every year was like an exclusive red carpet Hollywood event and Jobs would announce yet another innovative invention that would surely change history and your life.  From I-Tunes, to I-Phones to I-Pads, Jobs would excite the minds of young and old alike and have people lined up for days demanding to be first in line to pay $800.00 for the newest device.

Unfortunately, since his death Apple seems to be stuck in the mud and basically just changes the size and shape of its phone every year.  Some years they go smaller (I-Phone 4) some years the goes slimmer (I-Phone 5) and now they have gone larger (I-Phone 6) in an apparent attempt to keep up with Samsung.  That in itself tells you all you really need to know about Apple these days.  For years Samsung was accused (and rightfully so) of stealing intellectual property and designs from Apple, yet here we are in 2015 and Apple is now copying Samsung and making 5-6 inch phones and using silicon based screens that don’t crack just like Samsung introduced.  So far as we can tell, the only buzz created by Mr. Cook since he became CEO was to announce to the world that he is homosexual and considers his sexuality a “gift from God”.  In all the years Steve Jobs was Apple CEO , I don’t ever recall him stating “ I’m heterosexual and it’s a gift from God and by golly I’m going to a strip club tonight!”.  The likely reason is that he was too busy planning his next device and he knew that the most important thing to shareholders and consumers was his ingenuity not whether he cross dressed, was gay or bi sexual. Truthfully, I have no idea what Steve Jobs sexual preference was nor did i care as I eagerly unwrapped my I-Pad box for the first time.  It can be argued that Mr. Cook’s announcement may indeed turn off a whole segment of consumers who do not share his belief, particularly in the Middle East where Homosexuality is illegal as well as the Bible belt here in America.

Tim cook is clearly starting to feel a little heat and it may get even hotter after Jim Cramer read out loud an email from Tim Cook that basically gave boarderline inside non public information to the public about the company, its sales in China and his opinion on the Chinese economy.  In the email to Cramer at 8:00 am he states:

“I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August,” Mr. Cook said in the email to Mr. Cramer. “Obviously I can’t predict the future, but our performance so far this quarter is reassuring.” 

Coincidentally, Apple’s stock had been dumped the day before and futures indicated it was heading lower at least 7-8%.   Had that occurred Apple would have been down over 30% since in the last 70 days which is unheard of for them.  Instead the stock jumped back up and was even briefly up a few points before finishing the day down 2.5%.  The question however remains:  Is this any different than a pump and dump in which the CEO of a small company releases quasi information to try and get some stability in the share price and to get short sellers to back off?   Every month the SEC announces actions for a lot less.  Martha Stewart went to jail for getting a tip from the CEO of Imclone (on 3500 shares).  Is this that much different?  Cramer is a hedge fund manager and a national voice ( P.R. guy) that is being watched by tens of millions across the country right before the market opens and by several hundred thousand traders and brokers.  He just happened to send this information out in an email right before the market opens and his stock was about to get crushed?  The SEC went after Mark Cuban for insider trading so one would wonder if they would take a closer look at Cramer’s portfolio ( he has made it clear he loves Apple and holds the stock) and the fact he is pumping up the stock right before one of the worst days in Wall Street history, a case can be made that this was a collusive effort by the two to pump the stock up to the masses.  If this was a $1.25 tech stock that did the same thing , my guess is that there would have been yellow tape around the doors of the company and the IR/PR guy would be in handcuffs.  I’m not sure Mr. Cook should be in handcuffs, but I do think a verbal slap down and a hefty fine is in order.

Post Metadata

August 25th, 2015



Comments are closed.