What Worries Me Most About Apple Stock

(Justin Sullivan photo via the Chronicle)

While Apple stock has nearly quadrupled since Steve Jobs' death in 2011, its rise has been choppy, to say the least. Periodically the bears drown out the bulls re the company's purported lack of innovation, legal and regulatory troubles, priciness versus the competition, and lately the vulnerability to a trade war with China.

None of these bother me as much as C. Northcote Parkinson's warning, published over 60 years ago, as applied to Apple's new headquarters: [bold added]

"During a period of exciting discovery or progress there is no time to plan the perfect headquarters," he wrote. "The time for that comes later, when all the important work has been done. Perfection, we know, is finality; and finality is death."

The cost of Apple's "spaceship" HQ is approximately $5 billion, including contents. While the company had more than enough cash to pay for it, the diversion of management time had to be significant yet was available because, as Parkinson said, "all the important work has been done."

By the way, in financial terms it's been a loser. [bold added]

New figures released this week show the tech giant’s circular headquarters in Cupertino was assessed at $3.6 billion by Santa Clara County for property tax purposes. The valuation doesn’t perfectly coincide with its market value — how much it would sell for — but is based off a detailed appraisal of the building, which opened in 2017.

If you include computers, furniture and even farm equipment to take care of the property’s trees, the figure rises to $4.17 billion for the fiscal year that ended in June, the assessor’s office said.

The paint has barely dried, and the property is worth 18-28% less than what Apple paid for it. You or I might see a similar drop when we drive a new car off the lot, but, frankly, I expect better from a trillion-dollar tech leader.