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“The Problem with Apple”: Stock Slides Amid New Concern About Steve Jobs

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Apple shares fell Tuesday, bucking the broad market rebound and continuing a sharp sell-off that began during Monday's Worldwide Developer Conference.

Wall Street initial reaction to the conference was "extremely positive," Barron's Tiernan Ray reports. Analysts generally lauded the iCloud initiative and several reiterated "buy" ratings and raised price targets after the company said it has sold more-than 25 million iPads, far more than expected.

So what's eating Apple's stock?

"It's just profit taking," says Stephen Leeb, chairman of the Leeb Group and a longtime bull on Apple. "If any stock has had a massive run over the past few years, it's Apple."

Indeed. Apple shares have risen about 500% in the past 5 years while the S&P 500 is flat. But Apple has pretty much been stuck in a range of $330-$360 this year, performing roughly in line with the broader market. The stock is nearing the bottom of that range, which has some Apple watchers wondering if the stock is just marking time ("consolidating gains" in technical parlance) or has reached the end of its remarkable rally.

Over at Breakout, Henry Blodget, Matt Nesto and Jeff Macke discuss the disappointment over the absence of a new iPhone announcement as a possible explanation for the reaction. (See: No New iPhone! Has Apple Lost Its Edge?)

Leeb doesn't see that as a big deal and believes Apple's iCloud strategy is a bold stroke that will enable the company to maintain its place at the center of consumers' digital lives. With its dominance in online music and apps, Apple has a "tremendous edge" over competitors such as Google and Amazon.com, he says.

Where Leeb and the Breakout crew agree is that concerns over Steve Jobs' health continue to haunt Apple shareholders, despite the fact Wall Street has become comfortable with Tim Cook, Peter Oppenheimer and other Apple executives.

"I think the problem with Apple really is Steve Jobs," Leeb says. "This is a company that's probably more dependent on its chief executive than almost any other company."

Leeb, who continues to recommend Apple share to clients, lauds Jobs as "the most creative executive" working today. The bad news, of course, is Jobs is now on his second leave of absence for medical reasons. (See: Why Steve Jobs Is So Important to Apple)

"I'm not saying if he retired or something god-forbid happened that the company is going to disappear," he says. "But they're going to lose a little bit of an edge…he's very important to the company."

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com

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