On Monday, the world learned that Apple CEO Steve Jobs again needs to take medical leave to focus on his health. Sound familiar? In 2009, we heard about Jobs taking a similar leave of absence before returning a couple months later with a new liver. Certainly, we should all hope and pray for Jobs' speedy recovery, as he is one of the greatest tech visionaries of our time. But in light of the lack of details surrounding his medical leave, some are questioning whether Jobs should have to disclose specifics of his illness to investors. It depends.
Atlantic correspondent Ben W. Heineman Jr. argued yesterday that investors deserve to know more. Here's why:
Under the securities laws, companies are required to disclose material information: usually defined as any information that would influence an investor's decision to buy or sell securities.
In fact, Jobs did disclose information to investors. He wrote a letter telling them he would be taking a leave of absence for medical reasons. Should he have provided further detail? It depends on the illness' materiality.
The basic question is this: would additional information about Jobs' illness provide investors with greater certainty on how to evaluate Apple's stock? If not, then Jobs' disclosure responsibility is met. So really, it depends on how much certainty there is about the consequences of his medical condition. For example, if doctor's say he's sick but may get better, then letting investors know more detail wouldn't provide any more certainty than what they already know.