In an uncharacteristic move, Apple released a statement today regarding the rumors of the aquisition of Universal Music. In a statement from Steve Jobs:
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple and Universal Statement
- Thread starter MacRumors
- Start date
- Sort by reaction score
Securities fraud . . . ?
That would be a lawsuit waiting to happen. Sure, apple could deny having made an "offer" if all it's done is discuss the possibility, but securities lawyers will be all over them if a deal comes to pass for making false and misleading disclosures. Normally when a company is in negotiations, all they can say is neither confirm nor deny, because otherwise they subject themselves to claims that they made material misrepresentations. Since these negotiations are affecting the stock price significantly (up .50c since this release), Apple is probably pretty concerned.
That would be a lawsuit waiting to happen. Sure, apple could deny having made an "offer" if all it's done is discuss the possibility, but securities lawyers will be all over them if a deal comes to pass for making false and misleading disclosures. Normally when a company is in negotiations, all they can say is neither confirm nor deny, because otherwise they subject themselves to claims that they made material misrepresentations. Since these negotiations are affecting the stock price significantly (up .50c since this release), Apple is probably pretty concerned.
This certainly contradicts this story: http://www.theregister.com/content/39/30289.html
Maybe they're talking about Apple Records...
It's a scandal I tell you. Corporate BS. I just want my music...
Maybe they're talking about Apple Records...
It's a scandal I tell you. Corporate BS. I just want my music...
I think that this probably has to do with the effect that these rumors (which seemed to be a bit more widely publicized than most usually are) were having on both Apple and Vivendi stock. I imagine both companies wanted to squash these rumors ASAP.
Steve should have made that statement when the rumor was first reported, he could have prevented the Apple stock from dropping.
Notice that this carefully-worded statement does not preclude the possibility of them making an offer in the future. It simply states that they have not (yet) made any offer to invest in or purchase a music company.
Having said that, I think it would be better if Apple concentrated on other things.
Having said that, I think it would be better if Apple concentrated on other things.
Re: Securities fraud . . . ?
But normally when companies are in negotiations, the CEO of one company is not running around making statements about a supposed offer made by the other company.
I am a securities lawyer (though I defend, rather than prosecute, the suits -- so I might be biased), and you sound like you know what you're talking about too, so maybe we just disagree. The usual reason companies can get away with a "no comment" is that they don't have to talk about negotiations absent a duty to disclose. However, I wonder whether this rogue CEO's odd comments may have generated a duty on Apple's part to correct them (just as the CEO had done earlier).
And it's simply not the case that companies never discuss negotiations. They often don't, but there may be good business reasons for doing so, as long as they are careful about minimizing the risks of liability should things not pan out. And there are sometimes legal reasons for doing so (e.g., if necessary to make other statements made by the company -- perhaps in earnings forecasts to be broadcast later today -- not misleading).
The statement was obviously crafted with the assistance of counsel (given that it sounds so weird), and it specifically does not disclaim any ongoing negotiations. Asserting that there's been no offer is highly unlikely to be found later to have been misleading, since it's doubtlessly true.
But normally when companies are in negotiations, the CEO of one company is not running around making statements about a supposed offer made by the other company.
I am a securities lawyer (though I defend, rather than prosecute, the suits -- so I might be biased), and you sound like you know what you're talking about too, so maybe we just disagree. The usual reason companies can get away with a "no comment" is that they don't have to talk about negotiations absent a duty to disclose. However, I wonder whether this rogue CEO's odd comments may have generated a duty on Apple's part to correct them (just as the CEO had done earlier).
And it's simply not the case that companies never discuss negotiations. They often don't, but there may be good business reasons for doing so, as long as they are careful about minimizing the risks of liability should things not pan out. And there are sometimes legal reasons for doing so (e.g., if necessary to make other statements made by the company -- perhaps in earnings forecasts to be broadcast later today -- not misleading).
The statement was obviously crafted with the assistance of counsel (given that it sounds so weird), and it specifically does not disclaim any ongoing negotiations. Asserting that there's been no offer is highly unlikely to be found later to have been misleading, since it's doubtlessly true.
time to pick up apple shares...
I agree, (and took adavantage already), this last bit of rumor sent the stock to an all time low from investors who are usually quite skittish and do react to rumors. This year is going to be a banner year for Apple, in my opinion. We are going to see the end of the G4 vs x86, and we are going to see OS X get EVEN BETTER! All the while Windows flounders. In the meantime, check out this thread from the readers of slashdot about OSX, and tell me, is it hitting home in the Linux community?
http://apple.slashdot.org/apple/03/04/16/144226.shtml?tid=179
Anyway, I know this was off-topic, I'm sorry about that, but hey I'm psyched about this summer and fall for my favorite company!
I agree, (and took adavantage already), this last bit of rumor sent the stock to an all time low from investors who are usually quite skittish and do react to rumors. This year is going to be a banner year for Apple, in my opinion. We are going to see the end of the G4 vs x86, and we are going to see OS X get EVEN BETTER! All the while Windows flounders. In the meantime, check out this thread from the readers of slashdot about OSX, and tell me, is it hitting home in the Linux community?
http://apple.slashdot.org/apple/03/04/16/144226.shtml?tid=179
Anyway, I know this was off-topic, I'm sorry about that, but hey I'm psyched about this summer and fall for my favorite company!
I disagree.
Apple would become a rumor-refuting entity instead of a computer hardware/software corporation if they had to quell every rumor made about them.
Considering the magnitude of *this* rumor, it was probably decided in the best interest of the company and its stockholders (me!) to carefully make a statement regarding the issue.
There's nothing in the statement that could be considered misleading other than if they really did tender an offer for Universal Music prior to releasing the statement.
Wording is everything:
Perhaps Apple is considering only the Universal part of Vivendi.
Perhaps Apple does not consider Universal/Vivendi a major music company.
Perhaps Apple is considering investing in another company it hasn't commented about.
One can infer anything you like from this. What really intrigues me is how such a reputable source as the "Los Angeles Times" becomes the one to first make a story of this outside of the rumor sites to begin with? Now where will they be now that Apple has denied it?
Perhaps Apple is considering only the Universal part of Vivendi.
Perhaps Apple does not consider Universal/Vivendi a major music company.
Perhaps Apple is considering investing in another company it hasn't commented about.
One can infer anything you like from this. What really intrigues me is how such a reputable source as the "Los Angeles Times" becomes the one to first make a story of this outside of the rumor sites to begin with? Now where will they be now that Apple has denied it?
Re: Re: Securities fraud . . . ?
I'm a lawyer too, but not a sec. lawyer, so you've got the upper hand there. I agree the statement was carefully crafted, and it does seem conspicuously not to deny discussions, which may well make Apple safe.
I'm guessing the Vivendi guy made a lapse in judgment and said something basically blowing off Apple's current position to the wrong person. Then it got published.
What's really odd is that the denial has nothing to do with what Vivendi said, which was that it "expected" apple to make a bid that wouldn't be high enough. It sounds like the guy was trying to get the music business into an auction by a) saying apple was going to offer close to $6b, but b) that wouldn't be enough. In other words, Microsoft and others, you can top apple. Jobs, meanwhile, stifles the auction that vivendi is trying to create by denying there's an offer on the table, and privately calls up vivendi to bitch and say he'll stop dealings if they don't deny the quote, at which point they deny their claim.
Apple's denial really doesn't deny any claims. Vivendi expects an offer of 6b; apple says it has yet to make an offer. Translation: Apple and Vivendi have discussed a purchase and Apple has indicated that it might be willing to pay $5.9b for the business.
I'm a lawyer too, but not a sec. lawyer, so you've got the upper hand there. I agree the statement was carefully crafted, and it does seem conspicuously not to deny discussions, which may well make Apple safe.
I'm guessing the Vivendi guy made a lapse in judgment and said something basically blowing off Apple's current position to the wrong person. Then it got published.
What's really odd is that the denial has nothing to do with what Vivendi said, which was that it "expected" apple to make a bid that wouldn't be high enough. It sounds like the guy was trying to get the music business into an auction by a) saying apple was going to offer close to $6b, but b) that wouldn't be enough. In other words, Microsoft and others, you can top apple. Jobs, meanwhile, stifles the auction that vivendi is trying to create by denying there's an offer on the table, and privately calls up vivendi to bitch and say he'll stop dealings if they don't deny the quote, at which point they deny their claim.
Apple's denial really doesn't deny any claims. Vivendi expects an offer of 6b; apple says it has yet to make an offer. Translation: Apple and Vivendi have discussed a purchase and Apple has indicated that it might be willing to pay $5.9b for the business.
Re: Music Service
$1 a song is expensive? Hardly, considering the price of a new CD that has only 10-12 songs. (Well, you can call someone for 20 minutes . . .). And you don't have to buy the rest of the stuff.
They can't make it unlimited use, because the music cos. would never get any money back, unless you just "rent" the songs -- that is listen to any song in our catalog for $15 per month.
$1 a song is expensive? Hardly, considering the price of a new CD that has only 10-12 songs. (Well, you can call someone for 20 minutes . . .). And you don't have to buy the rest of the stuff.
They can't make it unlimited use, because the music cos. would never get any money back, unless you just "rent" the songs -- that is listen to any song in our catalog for $15 per month.
It is very common for companies in negotiations, or "talks" rather, to make statements like this if rumors get out of hand. The real question is, as someone stated earlier in another thread, "what was the motivation for the leak"???
As for the music service, I think they should stay FAR away from monthly fees. This requires thought, planning and most importantly COMMITMENT by the consumer. What they need is a payment system that is spontaneous so people can make impulse buys with ease. The "one-click" Apple licenses from Amazon is perfect for this. I think it will be a raging success.
As for the music service, I think they should stay FAR away from monthly fees. This requires thought, planning and most importantly COMMITMENT by the consumer. What they need is a payment system that is spontaneous so people can make impulse buys with ease. The "one-click" Apple licenses from Amazon is perfect for this. I think it will be a raging success.
Re: Re: Music Service
They are not competing with CD's they are competing with Kazaa, Gnutella, OpenNap. Which all are free. What is going to make someone pay $1 for a song they can get for free. The market value for a song is $0. What people are saying is, "because apple is doing this, it will work." Well there are currently several sites that allow you to download music on a per song fee basis, can you name them?
They are not competing with CD's they are competing with Kazaa, Gnutella, OpenNap. Which all are free. What is going to make someone pay $1 for a song they can get for free. The market value for a song is $0. What people are saying is, "because apple is doing this, it will work." Well there are currently several sites that allow you to download music on a per song fee basis, can you name them?
Another link to a diffrent thread about nearly the same thing.
Search here for the original wire.
Apple is sure keeping a lid on this if it is a real press release. If it is a legitimate press release it isn't on apples press page or in their hot news page. They may be letting the rumor process work for them. By using only one wire service and by not listing the press release on their website they may be trying to halt the damage that rumors have already done, by using the same process, but by controling the news source. I still find it odd. By not posting it on their website, it makes it hard to verify that it actually came from Apple. Wire news can be faked if one understands how the different wire services work and how to properly code a release.
I question this release.
Search here for the original wire.
Apple is sure keeping a lid on this if it is a real press release. If it is a legitimate press release it isn't on apples press page or in their hot news page. They may be letting the rumor process work for them. By using only one wire service and by not listing the press release on their website they may be trying to halt the damage that rumors have already done, by using the same process, but by controling the news source. I still find it odd. By not posting it on their website, it makes it hard to verify that it actually came from Apple. Wire news can be faked if one understands how the different wire services work and how to properly code a release.
I question this release.