January 19, 2006
Yesterday, after Apple reported its profit doubled last quarter, its stock price immediately dropped 7%.
That’s what I tried to do when I researched Chapter 2 of Bigger Isn’t Always Better. That’s the chapter called “A Bigger Stock Price Is Not Always A Good Thing.” Its bottom line is that (Wall Street folklore aside): stock prices often don’t reflect the underlying value of a business - especially in the short run.
This is not something Jobs needs my book to understand. He’s ignoring the stock market noise and listening to the voices in his customer market instead. And spending money this quarter to invest in new products and switch to a better processor for his Macintoshes.