Is apple in trouble? I read this.

[coffey7]

http://www.theglobeandmail.com/servlet/story/LAC.20060805.RAPPLE05/TPStory/Business

 

[Thomas Veil]

Some. They'll certainly have to explain to the SEC what happened (as soon as they figure it out); they may be penalized; responsible parties may be removed (and possibly jailed); and of course profits will have to be restated.

However, this doesn't appear to be nearly as bad as the Enron-type scandals we've seen in the past. That's why the article offers some hopeful signs:

Investors may be more forgiving with Apple because the iPod's success has propelled the Cupertino, Calif.-based company on a hugely profitable streak that most analysts expect to continue for at least the next few years.

"The focus should be placed on what we view as Apple's bright future -- not the past," ThinkEquity Partners analyst Jonathan Hoopes wrote in a research note yesterday.

Most other analysts expressed similar sentiments, even as they vented some frustration.

"This issue slightly tarnishes Apple's squeaky clean image, but, more importantly, this does not impact Apple's underlying fundamentals," Piper Jaffray analyst Gene Munster wrote in a note.

Optimism like that has helped Apple weather the stock option storm remarkably well so far.

Despite yesterday's downturn, Apple's stock price remained well above its value before the company's late June disclosure of "irregularities" in the handling of options given to employees between 1997 and 2001....

Apple has acknowledged that some of its nettlesome stock options were given to Mr. Jobs, but also stressed that they were cancelled in 2003 before he realized any gains -- a factor that might help insulate him from any possible fallout.

Analysts are betting Mr. Jobs will escape serious trouble.

"While we are not exonerating management for its error in judgment, we believe a 'worst-case' scenario where Steve Jobs is terminated is . . . unlikely to unfold," wrote ThinkEquity's Mr. Hoopes.

The prevailing attitude right now doesn't seem to be, "Hang 'em!" It appears to be, "How could such a bright company do something so dumb?"

Apple has a lot of good will built up in business circles, which is going to help them immensely in the months to come.