Wall Street unshaken by results of Apple stock options investigation

“Wall Street on Thursday was unshaken by Apple’s admission of its mishandling of stock options, and its disclosure that Chief Executive Steve Jobs knew about some of the irregularities,” Antone Gonsalves reports for TechWeb.

“Apple stock remained relatively stable the day after the Cupertino, Calif., computer maker announced that an internal investigation found that stock option grants made on 15 dates between 1997 and 2002 appeared to have dates that preceded the approval of the grants. Such a practice, called backdating, retroactively grants options on dates when a company’s stock price is relatively low, maximizing the potential profits for the option holder. Depending on the circumstances, the practice could be illegal,” Gonsalves reports.

Gonsalves reports, “Apple stock price ranged throughout the day between a low of $74.13 and a high of $76.16 on the Nasdaq Stock Exchange. The stock had closed at $75.13 on Wednesday. The lack of movement indicated that Wall Street didn’t believe Jobs was in any danger of being ousted. Jobs has been credited with Apple’s resurgence over the last few years and is the creative force behind the company. ‘At this particular point, it would seem virtually impossible that the level of activity we’ve seen so far is enough to remove Steve,’ Rob Enderle, analyst for the Enderle Group, said.”

Gonsalves reports, “While the company acknowledged that Jobs was aware that dates on grants in a few instances were changed, he did not receive, or benefit from, these grants. Jobs was also unaware of the accounting implications, according to the company. Enderle said these facts, assuming they are true, would make it highly unlikely Apple’s board would need to force out Jobs. ‘I don’t see this having any impact on Steve long term,” Enderle said. “It’s going to be a distraction for a short period of time, but I don’t see it going beyond that.'”

“Nevertheless, the case won’t be officially closed until federal regulators and prosecutors make a final determination,” Gonsalves reports. “Quoting a person familiar with the matter, The Wall Street Journal reported Thursday that federal prosecutors in San Francisco were investigating Apple’s stock option practices. In addition, an Apple attorney met with securities regulators and prosecutors on Tuesday, the newspaper said.”

Full article here.

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Analyst: Anderson, Heinen may be former Apple executives responsible for irregular options grants – October 05, 2006
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Apple’s special committee reports findings of stock option investigation – October 04, 2006
Shareholders allege Apple execs reaped ‘millions’ in unlawful profits – August 23, 2006
How options-backdating irregularities can affect your Apple Computer stock – August 23, 2006
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
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Apple announces update regarding stock option grants – August 11, 2006
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  1. I actually think Apple would be fine if Steve were gone. Steve has seemingly re-founded the company. People know what to do and the system is in place and intact. Even though people talk about Apple in terms of Steve, it’s really about the tech again. Apple makes some really strong stuff now with more to come. People like Steve and have a tendency to equate him with Apple. It’s a false connection. I don’t buy Apple stuff because I like Steve and his fashion sense. I buy Apple because they have made my life SO much easier over the years. I actually think that once Apple gets past the cult of personality, they’ll do better. Steve, like the PPC chips from IBM, just feeds the flames of those who use silly arguments to undermine Apple’s reputation. That’s annoying, but no matter what, Steve is a lightening rod. In time, the tech will speak for itself.

    I don’t want Steve to go, but if he does, Apple will do just fine. It’s the geeks who will ‘chicken little’ all over the place… until the next iMac revision when they’ll freak out/complain/exult and realize that Apple is no longer in the hands of those who don’t get it. Steve’s impact goes beyond his personal involvement; he’s remade the company with Apple-ites. It’s not about sugar-water anymore.

  2. “it would seem virtually impossible that the level of activity we’ve seen so far is enough to remove Steve,’ Rob Enderle, analyst for the Enderle Group, said.”

    There wasn’t enough activity to move the toilet paper roll by one square you moron.

  3. “Gonsalves reports, ‘While the company acknowledged that Jobs was aware that dates on grants in a few instances were changed…’ “

    This is NOT what Apple said. Apple acknowledged that Jobs was aware of the backdating. That is RADICALLY different — both ethically and legally — from CHANGING dates on option grants. No one, other than this stupidly poor excuse for a reporter, has ever accused Apple or anyone within Apple of changing dates on option grants.

    I rarely do this but… MDN Magic Word: foreign … as in: Reporting the real facts and getting the story accurate is completely foreign to this “reporter”.

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