Sunday, December 21, 2014

Exxon


Apple and Exxon Vie for the Value Crown

NEW YORK (TheStreet) — Exxon Mobil(XOM_) has seen its vaunted position as the world’s most valuable company by market capitalization challenged by Apple(APPL) this month, but days like this bolster the case that the oil giant will continue to command the greater prestige among investors.

Shares of Apple were taking a hit on Thursday in reaction to the announcement that the tech company’s CEO, Steve Jobs was resigning. On Wednesday evening, it was announced that Jobs was resigning and that COO Tim Cook was stepping up to take the company’s reins. Jobs, who’s been on a medical leave of absence since earlier this year, will serve as chairman of Apple’s board.

Apples shares fell immediately in reaction to the news — and the market cap was at $343.69 billion vs. Exxon’s market cap of $349.73 billion — reflecting the negative near-term implications of the CEO’s departure. While Apple’s course forward has largely hinged on that of its CEO, Exxon hasn’t demonstrated this type of vulnerability.

“The departure of Exxon’s CEO would have less of an impact,” says Luminous Capital partner Alan Zafran.

On the other hand, “Steve Jobs is the embodiment of the Apple culture. He was an incredible visionary who could create excitement and draw bridges for customers and vendors between current technology devices and where they were headed.”

“The near-term impact from Steve Jobs’ departure may have more to do with the ability of the company to sustain customer and vendor relationships than with the forthcoming sets of products that consumers will see in the coming year or two,” Zafran added. “Bear in mind that vendors, suppliers and customers would have to make strategic changes — manufacturing; operations; marketing — in alignment of Apple’s vision and in advance of the release of new products to consumers.”

“The situation with Steve Jobs and Apple is very different from Rex Tillerson and Exxon. Strategy is important for both companies, and the importance of solid management shouldn’t be understated. However, I would say that Steve Jobs has more notoriety as the face of Apple, and people seem to put a lot of faith in him and his innovative technologies and decision making,” adds Raymond James analyst Stacey Hudson.

Exxon Mobil