Estimating the market value of Steve Jobs using an event study

ABSTRACT

Using an event study approach, we seek to estimate the value investors placed on Steve Jobs by investigating the stock market reactions to his death. In the three-day window surrounding his death, the estimated cumulative abnormal returns are −5.76%. Given the market capitalization of Apple at the time, it can be inferred that investors valued Steve Jobs at 20 billion dollars. While tragic, the news about Jobs’ death is greeted favourably by Apple’s competitors. The competitors appear to be convinced that, without Steve Jobs, they can compete with Apple better.

KEYWORDS:

• Steve Jobs
• event study
• Apple
• competition
• stock market reaction

JEL CLASSIFICATION:

• G14

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ For instance, we use alternative estimation periods, alternative return calculations and alternative market indexes. These alternative tests produce qualitatively similar results.