Skewering Rob Enderle's conspiracy theory about Apple stock

Tech pundit Rob Enderle holds a unique spot in the pantheon of boneheaded "analysts" who never cease to turn out drivel not so cleverly disguised as reasoned analysis.

Tech pundit Rob Enderle holds a unique spot in the pantheon of boneheaded "analysts" who never cease to turn out drivel not so cleverly disguised as reasoned analysis.

While it's typically best to avoid engaging with pundits who laughably hold themselves up as experts, Rob Enderle has inexplicably managed to make a career out of it. For reasons that defy explanation, Enderle is often looked to for quotes in mainstream publications and will show up on TV stations like CNBC to offer "insight." To that end, if Enderle wants to position himself as a tech expert of sorts, then I'll gladly point out the myriad of ways in which his writing is often the antitheses of insightful, thoughtful, and intelligent.

Looking back at Enderle's writing over the years, there is certainly no shortage of examples that serve to prove that Enderle lacks credibility. Indeed, John Gruber astutely asked not too long ago whether Enderle is as much of an idiot as he seems or if he is, perhaps, a masterful troll.

The answer, I contend, is irrelevant. Enderle isn't a nobody publishing scarcely read opinion pieces in local newsletters. He's often quoted in mainstream publications like the LA Times and is paraded around - by himself and others - as an expert.

That said, let's take a look at Enderle's most recent piece, which, and you have to give Enderle credit for this, is as simple-minded as most of his writings as it pertains to Apple. There is something to be said for consistency, right?

Last Friday, Enderle penned a piece titled "Does Apple's Tim Cook Have a Lucrative Exit Strategy?"

The gist of the article is that Apple's recently announced capital return program is nothing more than a manipulative scheme set in motion by Cook to temporarily raise Apple's share price so he can sell his personal stake in Apple and retire a wealthy, wealthy man. What's more, Cook, Enderle writes, will attempt to time his departure just right so that his successor will come in and assume control of a company riddled with debt, thereby making it seem that any other CEO simply can't hold a candle to Cook's talents.

In a laughably pathetic attempt to support his thesis, Enderle tosses out a number of horribly misguided opinions and conspiracy theories which only serve to undermine his own credibility.

Let's dive in, shall we.

Enderle writes:

At the outset, Cook had to know that the only reason Jobs wanted him for CEO was because Jobs thought until the very end that he could come back. Given the choice, Jobs believed Apple's board would pick him. In other words, Cook was selected specifically because Jobs knew he couldn't do the job and would be an excellent placeholder because he was so badly matched.

The idea that Jobs picked Cook to run Apple in his place only because he was ill-suited for the job runs contrary to what we know about Apple under the helm of Cook.

For instance, when Jobs took a six-month leave of absence from Apple in early 2011, Cook assumed the role of acting CEO and ably steered the mothership as shares of Apple skyrocketed from $85 to $141 per share, a 65% increase. When Steve Jobs took yet another leave of absence in early 2011, Apple under the leadership of Cook continued to thrive. Revenues continued to break records while innovation in both Apple hardware and software continued unabated.

If Jobs truly wanted to pick a second-rate successor, he did a horrible job.

What's more, it's no secret that Jobs held Cook in high esteem and valued him as a trusted and extremely capable lieutenant. In fact, Jobs during a 2008 deposition called Cook one of Apple's four "ultra key" executives.

Enderle goes on to paint the following portrait of Cook and Apple's recently announced capital return program.

Even if Cook missed that mythical board meeting, watching the company shed value at a nearly unheard of rate—basically undoing years of slow-valuation increase in a few short months—would be enough to put him on the short list of soon to be ex-CEOs anyway. Given his astronomic salary, it's unlikely he'd ever get another CEO job—unless he founded a company, and he really isn't the entrepreneurial type.

More nonsense.

While Apple's share price has fallen rather drastically over the past few months, Tim Cook is not undoing years of "slow-valuation increase" in just a few short months. On the contrary, Apple's share price only began its impressive rise to the $700 range in early 2012 when it climbed from $400 a share to an all-time high of $705 a share.

Cook likely knows his days are numbered, but he likely wants two things: To maximize his stock holdings, which he'll likely have to divest soon after leaving Apple, and to leave a legacy of being better than any Apple CEO who follows him. What happens to Apple after Cook leaves will reflect directly on him. If Apple gets better, Cook will look like an idiot. If Apple continues to decline, the impression will be left that no one could have stopped the free fall, and the board will look like idiots for letting Cook go.

This is classic Enderle BS. Cook knows his days are numbered? Really? Says who? Also, note how Enderle likes to posit his own opinions about the personal motives of Tim Cook as fact.

Shortly thereafter, Enderle gets conspiratorial.

In the near term, though, the buyback will reduce the number of shares in the market. In addition, offering a huge dividend will entice more people to buy Apple stock. By the law of supply and demand, which a logistics guy like Cook knows backwards and forwards, the end result, regardless of Apple's performance, should be a massive stock price increase. And Tim Cook holds a lot of stock.

Yep, Tim Cook is a regular ole' Dr. Evil. It's not as if dividend payouts and enormous stock buybacks need to be approved by Apple's Board of Directors. Oh wait, they do. Enderle likes to paint this portrait of Cook as a maniacal and evil CEO operating with no supervision and completely looking out for his own interests. Only Enderle can portray Apple's plan to return billions of dollars to shareholders as nothing more than a underhanded scheme really meant to pour millions of dollars back into Cook's pockets.

And yet, this is the guy who is often quoted in newspapers and on financial programs.

Enderle continues:

If Cook times his departure right, the market will bid Apple's stock even more as he leaves—and, when it's time for him to sell those shares, Apple stock will peak. His forced sale will be tied to his firing, and any related price decline due to his sale will likely be minimal. Then his successor as CEO will take over a company with massive debt, vastly smaller cash reserves and an institutionalized huge dividend that consumes most of Apple's profits. In effect, the firm will be in a nose dive but lack the resources to effectively pull out. Cook will look pretty darn good against what happens after he leaves.

So let me get this straight. At the same time that Cook is responsible for Apple's shrinking share price, he is also secretly plotting to bring shares of Apple to all-time highs so that he can make out like a bandit while simultaneously leaving Apple in financial turmoil. Makes complete sense.

And all this without even touching on Enderle's innumerable fallacies regarding Apple's financials, such as Enderle's baseless assertion that Apple's dividend program will consume most of the comany's profits.

If anything, Enderle's view on Cook's motives reveals quite a lot about how Enderle himself would likely run things if he were ever in charge of a large company - namely, maximizing personal wealth and personal reputation at all costs.

It's not worth citing every drab paragraph from Enderle, but suffice it to say that Enderle's barrage of half-reasoned opinions drone on and on.

Enderle ultimately concludes:

This may serve as a good showcase of three things: Executive compensation can lead to unfortunate executive behavior, Jobs' efforts to assure his job may have posthumously damaged his company, and whoever takes over from Cook is still royally screwed. Actually, there's a fourth thing: Plans that assume investors are idiots don't always work.

The only thing being showcased here is the lunacy of Rob Enderle.

Lastly, Enderle would be well advised to know that half of Tim Cook's restricted shares don't even vest until 2021.

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