Apple Stock Options Fallout Continues

Discussion in 'MacRumors.com News Discussion' started by somairotevoli, Dec 27, 2006.

  1. macrumors newbie

    Joined:
    Jan 3, 2006
    #1
    from cnn
    http://money.cnn.com/2006/12/27/technology/apple_options/index.htm?postversion=2006122710
     
  2. macrumors 68020

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  3. macrumors 6502a

    phillipjfry

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    #3
    So many companies do this sort of thing all the time....

    Is it really a crime anymore? :p
     
  4. thread starter macrumors newbie

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    #4
    .
     
  5. macrumors 6502a

    xPismo

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    #5
    You don't spend the cash for a team of reps unless you need the protection. :(
     
  6. macrumors 68030

    nbs2

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    #6
    Stock option backdating

    As more info comes out and my stock continues to tumble, I have one thought for those responsible or aware of the accounting practices: :mad:
     
  7. macrumors G4

    Joined:
    Mar 4, 2006
    #7
    This one continues to rumble doesn't it? Thing to remember nbs2, is that Wall Street typically over-reacts to everything. So if the stock is tumbling 4% today, it will gain some if not all of that loss back tomorrow. The only things that will push it down permanently are 1) if Friday's refiling results in Apple having made enormous accounting errors and being fined by the SEC to the tune of a ten-digit amount, or 2) Steve Jobs resigns.

    Personally in your position I'd wait it out. AAPL is valued on future-performance more than anything. Unless 2) above happens, I'd say the stock will rebound quickly enough in early 2007.
     
  8. macrumors 6502a

    Joined:
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    california
    #8
    Re: So how bad is this for Apple?

    This is very, very, bad. This is a crime, and there are severe penalties Apple may incur. They are learning a very harsh lesson here, their secrecy can not keep the Feds from finding inaccuracies.

    Although I doubt this will hurt Mac or iPod sales since the products are amazing no matter how many documents have been falsified, the person above me was correct, you hire your own legal representation because you need it, and there is no time to mess around.

    I wish I could say due to my love for the executive team that I proclaim their innocence, but I can not as the Feds seem to know more than I do.

    Good luck to whatever side is telling the truth.
     
  9. macrumors P6

    IJ Reilly

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    #9
    Or think you might, which isn't exactly the same thing.

    The original law.com article:

    http://www.law.com/jsp/article.jsp?id=1167127308611

    I don't think anyone really knows what any of this means. The article implies only that the two Apple execs who have already resigned might be facing criminal charges. The markets are speculating that Jobs might be implicated somehow, but so far nothing anyone has actually said points in that direction.
     
  10. macrumors 68020

    someguy

    Joined:
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    #10
    Stuff like this makes me feel so stupid.

    Someone please help:

    What the hell is going on? What exactly was done? What kind of documents were falsified?

    I know it says they aren't sure which documents, but I mean, what TYPE of documents? I don't understand the situation.
     
  11. macrumors 6502a

    phillipjfry

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    #11
    Yes, you do. To protect your rights and make sure that everything is going smoothly. That fingers won't be pointed at you, in the out-of-control fashion that usually arises when everyone is trying to save their own a**.
     
  12. macrumors P6

    IJ Reilly

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    #12
    Again, this is almost 100% speculation. If criminal prosecutions do occur (still a big if), then the charges seem likely to be limited to two former Apple execs. Unless something deeply shocking and vastly different than what we've been hearing for the last several months emerges, then the damage to the company is also likely to be very limited. Just because the markets are currently in a tizzy over this doesn't mean we should get swept up in the speculation.
     
  13. macrumors 6502a

    failsafe1

    Joined:
    Jul 21, 2003
    #13
    I like to remind myself we are all innocent until proven otherwise. If anyone even Steve is guilty of anything willful then he is not above the law. I hope all involved are innocent or perhaps honestly mistaken. I always hope the guilty will admit it instead of trying to cover up.
     
  14. macrumors P6

    IJ Reilly

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    #14
    Documents filed with the SEC to record the granting of stock options to executives and/or board members. The entire controversy is over stock options that were allegedly back-dated, which means they were awarded in such a way as to be more profitable to the grantee. This isn't allowed. The potentially new dimension here is the possibility that some of these disclosure documents were filed fraudulently, which if true, increases the penalties on whomever was involved.
     
  15. macrumors 68040

    MongoTheGeek

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    #15
    Stocks fluctuate.

    Rumors make stocks fluctuate. When there are rumors of bad the stock drops. When the news actually comes out it goes back up. Look at MacWorld. Right after the keynote, no matter how spectacular the announcement the stock drops.

    The articles I've read seem to put most of blame on people no longer there. Jobs most likely will not be indicted. No one ever accused him of being a financial wizard and the issues are intricacies of accounting.

    Fred Anderson may be in trouble but he falls into the category of "no longer there"

    Whatever the restatement is, it won't change the ground truth. Apple has X shares outstanding, $Y in assets, $Z in sales, and $A in costs. There may be a change in "goodwill" but the EBITDA should stay the same.
     
  16. macrumors G4

    skunk

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    #16
    And makes you wonder what they were thinking. Cui bono?
     
  17. macrumors 68030

    nbs2

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    #17
    I know - I've been sitting pretty through their peaks and troughs all year. It's just a bit frustrating that the issues this time aren't performance related, but rather are accounting related. The performance problems are corrected (and then some) fairly quickly by the market. Accounting issues may be repaired by MWSF, but if Vista actually shows up it will be a couple of heavy rounds into Apple's armor. No permanent damage, but I could see it taking until May or so to recover fully.
     
  18. macrumors G3

    iMeowbot

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    #18
    Nonsense, Apple volunteered the information to the SEC.
     
  19. macrumors P6

    IJ Reilly

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    #19
    Eyes fixed firmly on the money, they were probably thinking of little else.
     
  20. macrumors 68040

    MongoTheGeek

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    #20
    I thought the article said that back dating was legal as long as it was accounted for properly.

    Apple should come out of this okay because they led the charge. They will restate some earnings probably fight some shareholder lawsuits but end up being okay.
     
  21. macrumors 68030

    princealfie

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  22. macrumors P6

    IJ Reilly

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    #22
    You could be right, but I read it again and didn't see such a statement. I thought back-dating was never allowed because it builds in an automatic capital gain. If the company wants to award cash grants to their executives, that's certainly allowed, but it has to be disclosed as such in their 10-K statements. The problem with back-dating, as I understand it, is it's an effort to hide compensation from the SEC and stockholders.
     
  23. macrumors G4

    skunk

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    #23
    Though he probably signed off various documents, he is claiming that, being no accountant, he did not know the accounting implications. Seems a bit disingenuous as a defence, but unless there's a paper trail showing otherwise, I'd say he'll probably get away with it.
     
  24. macrumors P6

    IJ Reilly

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    #24
    It does sound suspiciously like the Ken Lay defense. The SEC recently changed their rules to make it far more difficult for a chief executive to plead ignorance on financial matters, but I don't think these rules apply in this instance, either because of the dates when the grants occurred or because of the nature of the violation. Either way, I haven't heard anyone in the know say that Jobs is in any serious danger of being strung up.
     
  25. macrumors 603

    Dont Hurt Me

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    #25
    Its the same old story with any American company, give all the money to the boardroom class & CEO's, then close your american factories, pay your chineese workforce pennys a hour, work em 15 hours a day. Apple is no different then most american companys these days. This just goes to show that Apple isnt thinking different. Apple is guilty and they know it. They should share the wealth with the whole company not just those boardroom brown nosers.
     

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