“Bellwethers such as Apple Computer Inc. have gotten delisting warnings from the Nasdaq Stock Market,” John Shinal reports for MarketWatch.
Shinal reports, “But while it’s easy to get skittish about the so-called headline risk to tech firms tainted by options backdating, not all companies being investigated will suffer the same fate.”
“How bad the options backdating scandal can get for a company will depend mostly on two things: the accounting practices that companies had in place during the go-go days of the late 1990s, and how top executives react once they’re told their company is the target of an investigation,” Shinal reports. “The management of a large number of companies, including Apple, Juniper Networks Inc., Cnet Networks Inc. and Altera Corp., have taken a cautious approach that, while prudent for their executives, is adding to the confusion for investors.”
Shinal reports, “Companies in this camp have delayed filing their latest quarterly financial reports with federal securities regulators because internal probes into past options accounting practices have turned up problems. Those problems in most cases will force companies to restate results for prior periods, because backdated options will raise compensation costs and thus reduce net income for those periods.”
“Executives don’t want to sign financial reports they may have to restate, because federal laws passed in the wake of scandals a few years ago mean they can go to jail for it.
While that’s prudent for officials like Apple’s Steve Jobs, who would likely have a tough time managing the rollout of the next iPod from a cell, it results in less disclosure about a company’s operations,” Shinal reports.
“Moreover, companies that fail to file timely financial reports risk having their shares delisted by the Nasdaq. Apple has received such a delisting notice,” Shinal reports. “But while the risk of delisting is serious, it’s also remote, because markets like Nasdaq have a built-in appeals process that buys companies months to finish their internal options inquiries and file their reports.”
“The generous timetable offered to [Comverse] to file its reports suggests that Apple and others who received their first delisting notices this month will have at least several more months to file their second-quarter reports,” Shinal reports. “If they finish their accounting probe and executives are confident enough to sign and file financial reports, the stock drops caused by options revelations may turn out to be short term.”
Full article here.
Apple’s options imbroglio: Mac-maker granted options at or near key events in company’s history – August 18, 2006
Apple added to Nasdaq’s list of ‘delinquent companies’ – August 18, 2006
Apple unlikely to be delisted by NASDAQ – August 16, 2006
Apple CEO Steve Jobs drawn into stock options scandal – August 15, 2006
Apple announces update regarding stock option grants – August 11, 2006
As expected, Apple delays quarterly results due to stock-options grants review – August 11, 2006
Some stock options grant decisions were made by Apple board, and potentially, CEO Steve Jobs – August 10, 2006
Disney: no material impact from Pixar options – August 09, 2006
Pixar options draw scrutiny – August 08, 2006
Apple stock options scandal? What scandal? – August 07, 2006
Class action lawsuit over stock options filed against Apple Computer, Inc. – August 04, 2006
Wall Street forgiving of Apple’s stock option irregularities; CEO Jobs unlikely to be terminated – August 04, 2006
Apple’s stock option irregularities escalate into a scandal as world awaits Steve Jobs’ WWDC keynote – August 04, 2006
Apple warns of profit restatement dating back to 2002 – August 04, 2006
Apple loses 3.5% to $67.15 in premarket trading – August 04, 2006
Apple announces update regarding stock option grants – August 03, 2006
Shareholder’s options suit against Apple alleges ‘striking pattern that could not have been chance’ – July 11, 2006
Apple announces update regarding stock option grants – July 05, 2006
UBS: stock options probe unlikely to hurt Apple – June 30, 2006
Apple joins growing list of companies entangled in stock option ‘irregularities’ – June 29, 2006
Apple to investigate stock option grant ‘irregularities’ made between 1997 and 2001 – June 29, 2006