“CEO resignations often cause share prices to rise. Witness the effect of the latest CEO departure on Yahoo,” Dirk Schmidt writes for Asymco. “This typically happens because CEO replacements are not necessary when companies are successful.”
“In times of crisis, the market sees management change as a hopeful sign. But Apple is doing well,” Schmidt writes. “So it was commonly believed that if Steve Jobs were to leave the helm at Apple the stock would fall. However… the stock price has since risen.”\
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Schmidt writes, “Steve Jobs’ resignation as CEO, as sad as it may be, has reduced unsystematic risk from the stock and therefore “boosted” the share price performance.”
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