Hospital Confirms Jobs' Liver Transplant

Doctor says Apple CEO is recovering well, has excellent prognosis.

June 22, 2009, 3:39 PM

June 23, 2009 — -- Apple CEO and co-founder Steve Jobs had a liver transplant at a Memphis, Tenn., hospital and is rcovering well, the hospital announced today in a statement on its Web site.

The statement from Methodist University Hospital Transplant Institute comes after several days of intense speculation about Jobs' health -- and his company's future, after a report Saturday that the 54-year-old Apple boss had received a new liver two months ago.

In the statement, Dr. James Eason, the program director and chief of transplantation, did not say when the operation occurred, but said that Jobs "is now recovering well and has an excellent prognosis."

The announcement was made with Jobs' permission, according to the statement.

The hospital statement also explained how Jobs qualified for the transplant.

"Mr. Jobs underwent a complete transplant evaluation and was listed for transplantation for an approved indication in accordance with the Transplant Institute policies and United Network for Organ Sharing (UNOS) policies," the statement said.

"He received a liver transplant because he was the patient with the highest MELD score (Model for End-Stage Liver Disease) of his blood type and, therefore, the sickest patient on the waiting list at the time a donor organ became available," it said.

Jobs' health -- and what it could mean for the future of Apple -- has been a hot topic ever since January, when he said he would take six months of medical leave.

Shares slumped 4 percent the day he announced his leave and analysts pondered what would become of a company practically synonymous with its CEO's name, and criticized the company for the handling of the health issue.

"The problem for Apple is they should disclose fully or they probably shouldn't disclose anything," independent technology analyst Rob Enderle said. "Throughout much of this period, disclosures revealed that he was at little risk -- that he was recovering from some kind of imbalance. After the fact, [it's revealed that] not only did he have surgery but it might have been life threatening."

When the Wall Street Journal first reported that Jobs had the transplant, it did not name the source for the information and did not provide specifics on where or when Jobs had the transplant, beyond identifying the state.

But it noted that the waiting time for donated livers is substantially shorter in Tennessee than it is elsewhere.

At the time, Apple spokespeople would not confirm that the surgery had taken place.

"Steve continues to look forward to returning to Apple at the end of June and there is nothing further to say," Apple's Steve Dowling said in an e-mail to ABC News.

But Apple's silence did not stopped others from talking.

"There was definitely a surprise that it was as major of a recovery as it was," said Gene Munster, a senior research analyst for Piper Jaffray. "Given the fact that it was a liver transplant, there's probably going to be continuing questions about his health for a long time."

Noting the amount of influence Jobs wields over the company, Enderle emphasized his obligation to not mislead investors on matters related to his health.

How Much Does Jobs Need to Disclose About His Health?

Although he acknowledged that Jobs has a right to his privacy, he said, "There's no middle ground these days where you're allowed to cover up or lie about information that's material to the company."

Jobs has been private about medical matters, including a rare form of pancreatic cancer that was successfully treated with surgery in 2004. Members of Apple's board of directors, sources said, persuaded him that his health was "a fiduciary issue," interwoven with the health of the company.

But in January, the Securities and Exchange Commission opened an investigation into whether Jobs and Apple misled investors and shareholders by manipulating or withholding "material information" from the public.

An SEC spokesman declined to comment on the matter, saying that commission staff are not authorized to confirm or deny any kind of investigation.

But Enderle said the transplant could re-ignite the commission's interest in the matter.

"This is the same kind of thing that started the review, to my knowledge," he said. "So this would probably fuel that fire."

At the very least, he said, he expected Apple's board to be "much more aggressive in terms of getting Steve Jobs to be straight with them," since the board can be held liable for any misstatements.

Others, however, take a different view.

"The liver transplant could give the SEC [review] a little bit of impetus forward, but I still don't think they'll bring a case on it," said Peter Henning, a former SEC lawyer and professor at the Wayne State University of Law.

Pointing out that Apple has about 32,000 employees, he said information about one person -- even if it is the iconic Steve Jobs -- isn't going to make or break the company.

"This is a very delicate area. I can't see them wanting to get into a fight," he said.

While the law requires that companies disclose material information, Henning said the Supreme Court's test of materiality asks "would a reasonable investor consider it important in the total mix of information?"

CEO Health Matters Conflict With Privacy Concerns

"There's a lot of judgment in there and a lot of competing concerns," he said. "There's no right to total access with a person's health. Out of respect for that, I don't think the SEC case will go anywhere. Then they would be establishing a precedent and you have to be careful."

Jack Yoskowitz, a partner with Seward & Kissel LLP in New York who works in securities litigation, agreed that reports of the liver transplant would likely not set off SEC activity. Smaller companies, he said, might have so-called "key men" provisions surrounding CEOs with Jobs' kind of influence. But given the size of Apple, these measures wouldn't apply.

Although Jobs may be watched more carefully as he assumes the helm of the company again, Yoskowitz said that he likely disclosed enough when he initially announced his medical leave.

"They'll follow his every move because it is important to the company, but how much they have to disclose, that is a gray area," he said.

The Journal report of Jobs' liver transplant coincided with the release of the company's latest iPhone, the 3GS, and Piper Jaffray's Munster said the success of this weekend's launch will likely further calm investor concerns.

"They've had two great quarters with him not being around," Munster said. "Even as recently as this weekend they're showing that they're doing it in his absence."

Munster said his firm estimated Apple would sell 500,000 new iPhones over the weekend but on Monday Apple announced that it had surpassed 1 million units.

This recent success, analysts say, only emphasizes that the company can remain strong even as the health of its CEO fluctuates. Even before Jobs announced his departure, the company had been sending the message that Apple is more than Jobs, with a deep bench of executives ready to take the lead, they say.

When Jobs left in January, Tim Cook, the COO, assumed Jobs' day-to-day responsibilities. And Munster said that though it's possible that he could be added to the board and become the permanent CEO sometime soon, he's been the clear heir apparent since 2004.

Under his watch -- and in Jobs' absence -- Apple Inc. stock, which dropped to $78.20 per share in January after Jobs announced he was going on leave, has climbed steadily upward. On Monday, it closed at $137.37, about 1.5 percent below the previous day's closing price. (Munster said that, since 2004, Apple stock has dropped by about this much after each major event and product launch.)

"They've internalized a lot of lessons and to a degree so have consumers," said Avi Greengart, research director, consumer devices for Current Analysis. "There's such an understanding of what Steve Jobs likes and that's become emblematic of what an Apple product is."

As for Jobs, "he's shifting to more of a visionary role than an administrative role," Munster said.

He's reportedly returning, at first, on a part time basis, but Munster said, "For him, part-time is like a full-time. He's a workaholic."

ABC News' Ned Potter contributed to this report.

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