Apple Stock Options Fallout Continues

[princealfie]

Looks like Jay is the first one to give the right advice!

Buy on bad news, sell on good news.

Just be ready to buy some more if it keeps going down.

So stupid to advise this...!!!

Of course, if Steve Jobs leaves or resigns I wouldn't be surprised... such is the evil of the corporate life.

 

[BenRoethig]

Oh oh, does this end Steve Jobs as CEO?

I'd say they already addressed this possibility when Eric Schmidt joined the board. I think you'll probably see Jobs move into a President of the board/ figure head position with Schmidt taking over day to day operations for it. Apple could be a better company in the long run for it too. If he can keep the culture at Apple intact while adding more practical elements that Steve was biased against, this company could really take off.

 

[Swarmlord]

Yah sitting on your fat butt making poor decisions and letting the grunts in the company take the brunt of the fallout in the end. In the case of Jobs though he's made some good ones so *shrugs*.
<snip>

In other words, no, you don't know what a CEO does. Nice stereotype though. Should we go over the lazy union slobs down in shipping and receiving sitting on their fat butts waiting for an opportunity to lodge a grievance or strike? Both characterizations are as accurate.

 

[BenRoethig]

Another perspective which suggests that Steve DID NOT benefit - he surrendered that grant w/o exercising it:

http://today.reuters.com/news/artic..._RTRIDST_0_APPLE-OPTIONS.XML&rpc=66&type=qcna

But the CEO is ultimately responsible for what happens at his company.

FYI Apple's stock has moved downwards 3% in After Hours because something was leaked from the actual report given to the SEC. I know it was mentioned earlier (7.5 million shares) but no one pointed out the stock drop.

IMO, I'd be weary to buy anything more than a half position until Friday. We all know that Apple's stock is moving up on ipod sales, mac sales and rumors, and the first 2 are not going to change. So I see Apple's restatement of earnings doing nothing more than maybe a short term drop of a couple points (buying opp.) OR a relief rally sending this stock on its way up for the pre macworld rally.

MY only fear is a resignation of Jobs before MW....this could be bad.

Note: Somehow I caught the top of the recent rally and sold 25% of my current position.

He could lessen any impact by changing over the operational reigns while remaining president of the board during some kind of change of command ceremony during the keynote. He could use health as an excuse. The more "normal" it seems, the better for Apple.

 

[mac-er]

I'd say they already addressed this possibility when Eric Schmidt joined the board. I think you'll probably see Jobs move into a President of the board/ figure head position with Schmidt taking over day to day operations for it. Apple could be a better company in the long run for it too. If he can keep the culture at Apple intact while adding more practical elements that Steve was biased against, this company could really take off.

If the SEC determines that Steve Jobs acted inappropriately, that would be the end of his career (maybe he could work in the shipping department or manage a retail store), the SEC would not allow him to serve on the Board or any any executive position.

This is a fairly serious situation at this point. Many CEOs have bit the dust due to this situation.

 

[Dont Hurt Me]

This is the sign of todays greedy corporate society in America, the CEO class get all the perks,stock options ,$$$, Jets etc and the people who actually make the company work like the guy building those computers,the guy shipping those products to your house or even the 50 cents a day chinamen putting those pods together in China get zilch. Apple was just looked into because of its practices in CHINA for christ sake.
Because everyone is doing something doesnt make it right. Its interesting how so many want to defend Apple for illegal activity. Its time for these greedy corporate types to share with the others who really make the company work rather the then the boardroom committee members who are sitting on their fat buts having coffee & donughts.
I myself doubt Jobs is responsible but I know that the CFO of that company is. APPLE,GM,TYCO,ENRON,....................all the same, close factories here in the U.S. and screw your workers so the paper pushers who do the least get everything. Its time to clean up all the boardrooms in all the corporations.

 

[MacVault]

1) Should I hold off on buying a Mac now because of this scandal?
2) Will this put Apple out of business leaving me with no support for my Apple products?
3) Is Macworld still going to happen?
4) And is Steve Jobs still going to Keynote the Expo?
5) Will this really put a damper on Macworld Expo?
6) Does this just spell the end of a great company with great products but $h1ty accountants/executives?

 

[Swarmlord]

<snip>...sitting on their fat buts <sic> having coffee & donughts <sic>.
<snip>

Maybe they got higher marks in Hooked on Phonics.

 

[Queso]

1) Should I hold off on buying a Mac now because of this scandal?
2) Will this put Apple out of business leaving me with no support for my Apple products?
3) Is Macworld still going to happen?
4) And is Steve Jobs still going to Keynote the Expo?
5) Will this really put a damper on Macworld Expo?
5) Does this just spell the end of a great company with great products but $h1ty accountants/executives?

No, No, Yes, Possibly Not, Possibly, No. And 6 comes after 5

 

[Dont Hurt Me]

Maybe they got higher marks in Hooked on Phonics.

Attack spelling, its a regular tactic when you dont have a argument isnt it? Spelling mistakes dont bother me that much anymore. This isnt a newspaper.

 

[skunk]

Attack spelling, its a regular tactic when you dont have a argument isnt it? Spelling mistakes dont bother me that much anymore. This isnt a newspaper.

It's one of your many charms.

 

[Dont Hurt Me]

It's one of your many charms.

or faults! sometime ill go back and make corrections sometimes not. This one is a not.
I really feel strong about the seperation of the wealth in America and our govt and the corporations are killing off the middleclass,terminating factories,and giving all the wealth to the corporate CEO's and little to anyone else. How many times must we read about these moral misdeeds by greedy corporate america? Greed is destroying our manufactoring base. Does apple even have a American assembled Mac anymore? Heck even my Dell was made in the U.S.A.

 

[whatever]

Yah sitting on your fat butt making poor decisions and letting the grunts in the company take the brunt of the fallout in the end. In the case of Jobs though he's made some good ones so *shrugs*.
I've never met a CEO from a moderate to large company, I've met about 6 over the years the biggest being Michael Dell 3 years ago at a reception in Irving TX, that I didn't hate intensely. Their perception of reality vs. everyone else's is pretty much inverted. Guess who's is generally right?

Yes, their perception is slightly different. It's more macro than micro. Where you might be concerned about individual employees, they have to worry about entire towns, cities and sometime states and while all of that happens worry about the bottom line.

Then if the CEO cares about the company, they'll make the tough decisions to keep the company alive, no matter what.

Ultimately the employee has a choice, either be a team player or get out.

Now that might sound negative, but how many great companies have started and been successful, just because of that. The employees pull together and the company rises or employees are disgruntled and leave only to create their "utopian" company. It happens everyday.

 

[IJ Reilly]

I just read this article:

http://www.ft.com/cms/s/801e1b82-9605-11db-9976-0000779e2340.html

and came here to make sense of it and found this thread already going.

According to the article Jobs was given 7.5 million options at 18.30 a share. So, does that mean at any time he could sell the stock without really having bought it to begin with? An option is essentially the option to sell a stock if the price is favorable?

More or less. The difference between the granting price and the market price is a cash value to the recipient. He could either sell the options or convert them into shares, and then either sell or hold. However, in this case the price dropped and the options were cancelled because they'd become effectively worthless.

If that understanding is correct, do you at the point you sell it gain the profit of the value of those shares, or the difference between the current price and what the shares were given to you at?

And if it is the latter, is that why they backdate to give the employees the lowest possible price?

The options are an opportunity to buy the shares at a fixed price, so the option-holder has to come up with cash if they want to convert the options to stock. If the market price for the shares is higher than the option price, then the option-holder gets a discount.

The incentive to back-date is that it's a way of giving execs and board members a cash bonus that doesn't get recorded as an expense on the company's books.

If Jobs really has committed a crime, it would be rather ironic given his comments about karma and purchasing legally, and that every iPod says "Don't steal music."

I think it is very unlikely that Steve Jobs has committed a crime.

 

[Dont Hurt Me]

Yes, their perception is slightly different. It's more macro than micro. Where you might be concerned about individual employees, they have to worry about entire towns, cities and sometime states and while all of that happens worry about the bottom line.

Then if the CEO cares about the company, they'll make the tough decisions to keep the company alive, no matter what.

Ultimately the employee has a choice, either be a team player or get out.

Now that might sound negative, but how many great companies have started and been successful, just because of that. The employees pull together and the company rises or employees are disgruntled and leave only to create their "utopian" company. It happens everyday.

CEo's worring about towns People Please these guys worry about two things, their pocketbooks and the stockholders and no one else. I dont think Apple was giving a hoot about those chineese working 15 hr days until someone did some poking around. Dont spin corporate greed into morals. Apple is worried about one thing $$$. Corporate America doesnt worry about any town,city or state unless there is money in it for them period.

 

[hagjohn]

More or less. The difference between the granting price and the market price is a cash value to the recipient. He could either sell the options or convert them into shares, and then either sell or hold. However, in this case the price dropped and the options were cancelled because they'd become effectively worthless.

Even if the options where "canceled" because of a price drop, it would still be illegal, if true.

 

[gnasher729]

Heck even my Dell was made in the U.S.A.

Only because some state paid Dell a few hundred million dollars for the privilege of having a Dell plant there. Not exactly the way capitalism is supposed to work.

 

[BenRoethig]

I think it is very unlikely that Steve Jobs has committed a crime.

Even so, are the investors still going to trust him?

 

[IJ Reilly]

Even if the options where "canceled" because of a price drop, it would still be illegal, if true.

I don't think it's a question of truth -- the option grants happened. The issue is intent, and who was responsible for the decision to back-date. The new question which has apparently arisen is whether filing documents were prepared fraudulently in an effort to cover up. I have a very strong feeling that the fault is going to be laid squarely on two already departed Apple employees. One point which is going to be made in Jobs' defense is that he was at the time the CEO of two companies and was not micromanaging such matters, that it was the responsibility of his CFO, among others, to file the proper paperwork.

 

[Unspeaked]

Only because some state paid Dell a few hundred million dollars for the privilege of having a Dell plant there. Not exactly the way capitalism is supposed to work.

I dunno, that sounds exactly like capitalism to me!

 

[IJ Reilly]

Even so, are the investors still going to trust him?

Only if he can continue increasing Apple's revenue and profits.

In the end, this is what investors care about.

 

[Swarmlord]

Attack spelling, its a regular tactic when you dont have a argument isnt it? Spelling mistakes dont bother me that much anymore. This isnt a newspaper.

Just using sarcasm to make a point. (I make my own share of spelling mistakes too thanks to these cheap, key bouncing keyboards!) I've been an executive at one Amex traded company and a director level profession at two others and I find the stereotypes attributed to executives in this forum amusing.

There are certainly bad apples at the top of many companies, but if people think that highly paid executives aren't scrutinized more closely than their employees for the compensation that they are paid then they would be very wrong. They also don't all have fat butts, eat donuts and watch people do "real" work. If they didn't have the qualifications to run the company as far as the owners of the company were concerned, the person wouldn't hold the job very long.

I do think that the current compensation techniques used by publicly traded companies is out of whack though. A bonus by definition should be a fraction of a person's wages and not a multiple of it.

 

[Dont Hurt Me]

Only because some state paid Dell a few hundred million dollars for the privilege of having a Dell plant there. Not exactly the way capitalism is supposed to work.

I really dont know but I like to see those made in America stickers these days because corporate greed has almost eliminated them.

 

[Swarmlord]

I really dont know but I like to see those made in America stickers these days because corporate greed has almost eliminated them.

Designing things and providing technical services pays a heck of a lot more than making things. We make plenty of things especially things that aren't mass produced and will continue to do so.

I don't know about you, but I'm glad I work providing computer services rather than working in a cotton mill or a factory assembling McToys.

 

[Dont Hurt Me]

Just using sarcasm to make a point. (I make my own share of spelling mistakes too thanks to these cheap, key bouncing keyboards!) I've been an executive at one Amex traded company and a director level profession at two others and I find the stereotypes attributed to executives in this forum amusing.

There are certainly bad apples at the top of many companies, but if people think that highly paid executives aren't scrutinized more closely than their employees for the compensation that they are paid then they would be very wrong. They also don't all have fat butts, eat donuts and watch people do "real" work. If they didn't have the qualifications to run the company as far as the owners of the company were concerned, the person wouldn't hold the job very long.

I do think that the current compensation techniques used by publicly traded companies is out of whack though. A bonus by definition should be a fraction of a person's wages and not a multiple of it.

Just for example I have a very well off brother in law who works for a major company. He made big money shutting down call centers in the U.S. and moving them to India and Canada. Apple has talked to him about their call centers as matter of fact. Its called the selling out of America, firing americans and moving overseas and then the CEO types get even fatter checks. When we worship only the $$$ and little else we have problems. The CEO class is way, way, way, overpaid,over compensated and I agree the situation is out of control.