Apple Inc. had a rough session on Monday as the stock and the general market started crashing amidst concerns about a global crunch headed by China. Shares of Apple had lost about 20% in the last three months and the situation took a turn for the worse as the stock entered correction mode. It took the timely intervention of CEO Tim Cook in a letter to Jim Cramer to halt the selloff in the stock.
However, Fortune reports that Tim Cook has a personal interest for saving Apple and the market from crashing on Monday. Tim Cook did more than most CEOs could have done to save his firm from sinking when he sent a note to Jim Cramer to address concerns about Apple’s China business. However, Fortune notes whether by design or by accident his note to Jim Cramer “in theory, have personally saved him millions of dollars worth of unvested Apple shares.
Tim Cook and his vested Apple shares
When Tim Cook came on board as Apple CEO in 2011, the firm’s board of directors awarded 1 million RSUs (restricted stock units to him. Half of the RSUs is timed while the other half is performance based. On Monday when the shares of Apple wanted to enter correction mode, Tim Cook was billed to acquire some 560,000 vested RSUs that was worth almost $58M at least based on a filing with the U.S. SEC.
The fortune article suggests that Tim Cook probably stepped in to save Apple from falling so that he won’t lose out on his RSUs. However, it is important to note that the SEC filing shows that Tim Cook did not sell any of his RSUs even though Apple held 290,836 of those shares as part of statutory conditions.
Nonetheless, the fact remains that RSUs that vested for Tim Cook’s on Monday were worth $58M. If the stock has closed at their $92 trading low before they rebounded, Tim Cook’s RSUs would probably be worth some $14M less.
Wall Street is bullish on Apple
Irrespective of your take on Apple downturn, Tim Cook’s RSU, and the situation in China, Wall Street seems to be confident that the firm has bright prospects ahead. The Wall Street Journal reports that a Wells Fargo Securities analyst, Maynard Um has raised his rating on Apple from “market perform” to an “outperform”.
Um believes that the fears of a correction the shares of Apple are overblown. He says, “We are incrementally more positive… While we note that our fundamental stance on Apple’s challenges are unchanged, we believe shares have over-corrected.”