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Apple Announces More Options Troubles
fremen writes "Apple today announced that they will be withdrawing their financial reports back to September 29, 2002 and delaying the filing of future reports after finding more backdated options problems. Companies backdate their stock options by looking back over a period of time and choosing a historical low as the option strike price. While not illegal, this must be fully disclosed to investors and properly accounted. Expect more uncertainty in the coming weeks as regulators must now uncover how much of Apple's record profits were incorrect as well as whether or not Steve Jobs will be able to continue leading the company."
I mean, if he has leave, he's just going to come up with something bright and new (not "NeXT" this time, I vote for "TheOneAfter"), which is then going to be bought by Apple after a few years... :-)
Could be worse. Could be raining.
Wouldn't this be an accounting issue, for the Chief Financial Officer, not the Chief Executive Officer (Jobs)?
Michael
There is no cryptographic solution to the problem where the intended receiver and the attacker are the same entity.
Who in their right mind would remove a CEO (a loved one at that) of a successful company? A company whos share price is soaring nevertheless
The only mention in the article of Jobs is:
"Apple said in June that one of the stock option grants was to chief executive Steve Jobs, but it was subsequently canceled and resulted in no financial gain to Jobs."
So why is there some statement quoted questioning the continued status of Jobs as CEO?
Seems like someone is playing fast and loose with the article.
Some days it's just not worth
chewing through my restraints.
Last I heard, there's gonna be Six Different Options to license a single release of their OS - namely, Windows Vista. And everyone from Dvorak to Thurrott has predicted lots of Options Troubles with Vista :-)
... [hides under table]
Oh, wait!.. you meant Stock options?
If you keep throwing chairs, one day you'll break windows....
Bad news for shareholders and possibly some Apple employess, but unless this is an extremely massive problem it shouldn't really have much effect after a couple of initial punishments.
Haiku for you!
Sorry to reply to my own posting: with 'public' I meant also the stockholders. They ultimately decide the fate of Jobs. And as it goes with public companies: they often tend to listen to their stockholders.
Slashdot: stuff for news, nerds that matter, matter for news, stuff that nerd
Exactly - I'm at the edge of just giving up on reading Slashdot entirely with the retarded articles coming through lately with little jabs thrown in throughout. It's always had it to a small degree, but it's just getting worse lately.
Is this an investor board now? I rarely see purely financial news conserning other companies (Dell, Leonovo, AMD, etc..) posted here....
Or was this news posted because the company happened to be Apple? Every minor news about it seems to be posted on Slashdot.
Well.. it really only ever got borrowed from German:
Schaden = Damage
Freude = Enjoyment
In this case the literal translation is accurate, it's enjoying something (someone else) being damaged.
/Mikael
Greylisting is to SMTP as NAT is to IPv4
LOS ANGELES, Aug 3 (Reuters) - Apple Computer Inc. (AAPL.O: Quote, Profile, Research) said on Thursday it would likely need to restate earnings and will delay filing its quarterly report because of additional irregularities it found in its accounting of stock options and its shares fell 6.6 percent.
PARSER STACK EXPLOSION.
No folly is more costly than the folly of intolerant idealism. - Winston Churchill
I suppose that should go for the kde and Gnome developers, too. Damn them for taking this whole UI thing too far!
By the way, don't you think you sort of have your head up your ass because you're taking this whole mentally retarded comment thing too far?
It's not offtopic, dumbass. It's orthogonal.
First Comverse (http://www.comverse.com/), then Sandisk (www.sandisk.com) and now Apple? Whats with these people and their stock options?
While I have no actual idea what that means I have a feeling the interpretation in the summary is a bit sensationalistic. If it really was that bad, would Apple really do it? Or are we really facing an Appleron?
Justice is the sheep getting arrested while an impartial judge declares the vote void.
I believe in Germany it is only used for the loud laugh at at a slapstick like situation you know like you see in Americas funniest home videos and nothing else. But using a German word sometimes make things sound a bit more sinister than it really is ;-)
welcome to slashdot spin...
The shareholders might not like tolerate things like this, but they're clever enough to know that Jobs IS Apple, and they'd lose a lot of their appeal if they made him resign. Remember what happened last time he left?
1. There's a difference. Enron was purposefully and illegally cooking their accounting books and they got caught. Apple themselves noted a discrepancy between practice and what should be reported to shareholders. Enron executives bilked shareholders out of billions of dollars. Apple granted stock options backdated at the lowest price and did not include them on a report. 2. One company self-reporting a problem does not make a trend. There are thousands of companies, and statistically I would wager that there are more than a few that have also reported similar discrepancies over the course of their existence. Thus, there is nothing stating that the CEO should have to leave his company for discrepancies filed by his own company (and the finance department, no less). Your perception is not reality. While I agree that the 'public' won't tolerate being ripped off, they also should know that this doesn't fit the 'being ripped off' scenario. I understand where you're coming from, but I don't think this is such a scenario.
The quote is from fremen, the submittor. While it implies that the article says that (or something like it), he's not actually claiming to be quoting the article itself.
It's official. Most of you are morons.
This is basiclly a case of "oops we paid our executives 12 million dollars not 10...our bad"
I just love this comment..
"but as is becoming increasingly clear with Apple, that success is not to do with doing good business, rather it's just bad accounting"
have you been outside these last two years? you go on the subway or any metro and you see that 1 out of 5 people has white earbuds sticking out of thier ears.
Sometimes I think people who submit articles to Slashdot are pure idiots.
The original article makes no mention of "backdating options" whatsoever. "Backdating options" is an illegal and criminal method of giving employees more money by chosing the date of an option grant long after the option is granted, usually to a time when the stock was low. Even just with the usual random fluctuation of the share price, this can make options much cheaper and therefore more valuable for the employee. However, nothing like that was mentioned in the article at all. What was mentioned was "possible irregularities in the accounting" of the value of stock options, which was found by Apple itself in an internal inquiry that it started itself, and it was Apple who called the SEC about it, not the other way round. And since the rules for the accounting of stock options have changed a lot in the recent years and are quite complicated, it is quite possible for a company to account them incorrectly by mistake. The bit that the submitter added about Steve Jobs has been pulled out of thin air altogether, just to make it sound more interesting.
This is like Mr. Smith calling the Inland Revenue, telling them that he might have made a mistake in his tax returns, and a submitter on Slashdot calling him a thief and criminal.
"We became aware of this impropriety about two years ago, and pushed out the former CFO who was solely responsible...."
Or some such variant thereof.
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"Apple today announced that they will be withdrawing their financial reports back to September 29, 2002 and delaying the filing of future reports "
Correct.
"after finding more backdated options problems. "
Incorrect.
"Companies backdate their stock options by looking back over a period of time and choosing a historical low as the option strike price. While not illegal, this must be fully disclosed to investors and properly accounted."
Incorrect. Backdating options is illegal, that's what people will go to jail for. That is also what Apple hasn't done .
Expect more uncertainty in the coming weeks as regulators must now uncover how much of Apple's record profits were incorrect "
Regulators are not involved in this at all. This is an Apple internal inquiry.
"as well as whether or not Steve Jobs will be able to continue leading the company."
Taken out of thin air.
In other words, the submitter took one line from the quoted article, then added 90 percent bullshit to it.
That's not real Swedish. There's no "bork, bork, bork" at the end.
Try to fool me...
Slashdot - where whining about luck is the new way to make the world you want.
Bullshit on Slashdot? Never...
But we visit it daily all the same.
1. Post bogus story to /., with incorrect statements and FUD about Jobs being forced to leave Apple.
2. Wait for damage to Apple stock prices.
3. Buy cheaper shares of Apple stock.
4. Profit.
nt
Whoa, whoa, whoa...you're talking about two very different things. The MS antitrust had to do with Microsoft packaging their products, which compete with other products in the markteplace, for 'free' (read: cost of production is hidden in the license price of Windows), which degraded competition in the market.
The iPod and iTMS are obviously cornerstones of Apple's current earnings, but the iPod simply requires that you use proprietary software to transfer music onto it--not uncommon for peripheral devices, and not anticompetitive--and iTMS is just a media download service that happens to have some DRM with it--again, not uncommon for media download service, and not anticompetitive.
What exactly are you asking for?
--- What
Funny, I read that as "former lover".
1. Apple announces accounting irregularities. 2. Apple stock drops 5-6%. 3. Invest in Apple stock while it is low. 4. WWDC 5. Profit$$$$$
This may be the most blatantly misleading submission to
Seriously, its one way companies can reward employees and employees can make it big. Because accounting rules are tricky companies can give employees stock for cheap without it effecting the balance sheet. If you look at what CEO's are pulling down, stock options appease employee grumbling.
Either submitter has a short position in AAPL or lacks basic reading and comprehension skills. Since this is slashdot, probably the latter.
It's always had it to a small degree, but it's just getting worse lately.
Snarky is the new black.
It's not offtopic, dumbass. It's orthogonal.
Actually, it could be the editor. They're known for rewriting (badly) submissions and inserting their own editorial content in confusing ways.
It's not offtopic, dumbass. It's orthogonal.
"Hey Fred! Steve. How's everything? Look, I'll get to the point. Do you think I could lure you out of retirement? Just so I can publicly fire you? No? How about I let you borrow the gulfstream for the weekend? Free passes to Disneyland?"
It's not offtopic, dumbass. It's orthogonal.
Anyone hear updated news on that.. that was crazy. Insanity.
According the Bloomberg, it was backdating. And when the Reuters article mentioned a "stock options scandal," there is little question as to what it refers. Taking a step back and viewing the original article as an investor, it seems certain that options backdating was implied. That's the only "scandal" going on right now.
Backdating options is illegal, but it could have been an honest mistake. A delayed executive approval can effectively backdate an options grant, but whether that happened at Apple is unknown at this point.
This an absurd statement. Why is it even in the submission? Jobs certainly isn't going to jail, and that'd be the only way he wouldn't "continue to lead the company."
The submitter simply pulled it out of his ass.
the PP meant "have to buy" as in opposition to "the company gives them to you as a bonus" (like the execs); for instance
ordinary employee:
annual salary $30k
annual stock options of $5k mean: you can buy $5k of company's stock (and keep the remaining $25k), provided you wait a year before selling it. If one year after, your stock is worth $1k, you shelled out $4k for nothing; if the stock is worth $10k, then you won another $5k. (best case: gain; worst case: loss)
executive:
annual salary $100k
annual stock bonus of $20k means: after one year, he can either have $20k in money or the value of $20k in stock (at the price of the beginning). If one year after, his stock is worth $1k, he chooses $20k in money; if it's worth $40, well, he chooses that. (worst case: no loss; best case: gain)
or somesuch.
HTH
It's better to be the foot on the boot than the face on the pavement. ~~ tkx Kadin2048
An employee stock purchase plan (where you buy stocks at a discount if you agree to put money into the plan) is something completely different than options. ESPPs generally offer the stocks at a discount to the current price, or a discount off the average price over some historical period, and once you have signed up for a period, you are obligated to purchase the stocks. Options are, well... optional. They are an offer to sell you a certain amount of stock at a particular (fixed) price. You can choose to exercise the options and purchase the stock or not, in which case you aren't obligated in any way to do anything.
My last employer offered options, and I had a grant that was vested when I left. But the options were underwater (they cost more to exercise than I could get by selling the stock) so I didn't exercise them. I now have a lovely piece of paper that says "Option Grant" at the top, but which means nothing.
Jobs either decided not to exercise options, or the options were withdrawn. In neither case is the they type of class-warefare issue that you imply.
Interested in a Flash-based MAME front end? Visit mame.danzbb.com
"1 out of 5 people has white earbuds sticking out of thier ears"
Its called ear wax. And it can be treated.
Kloss
Rollin' rollin' rollin'...
AAPL stock is fallin'...
Move 'em out
Move 'em out
Move 'em out
etc.
he even turned back a slew of questionable options a while back. he doesn't appear to be another bernie ebbers.
if this is supposed to be a new economy, how come they still want my old fashioned money?
Do you think this is why Nancy Heinen left? They never did give a good reason for her leaving. Maybe she wanted to make the misinformation public and they disagreed. Or maybe she was the reason for the mistake...
Boom Shanka
to Microsoft and I wonder what the comments would be?
/. and the Apple can do no wrong. But if this is true (big ass if) it could really hurt APple. The SEC may start it own invistagation of Apple and t hat could really be bad if Apple does have anything to hide.
Would everyone here be so quick to call the article a load of BS and defend that company?
I realize this is
You know, you wrote a lot of stuff there, and I didn't read any of it, which is a shame because it doesn't *look* as though it's trollbait from a cursory glance.
There's no way you're going to get people to read your stuff if you don't use paragraphs, and break your points up into digestible pieces...
Just a friendly hint.
Simon
Physicists get Hadrons!
If so, bye Steve!
How much does Jobs actually have to do with day to day operations at Apple? He has been intimately involved with day to day at Pixar, which probably doesn't leave much time for Apple. Does anyone think it's safe to say that Jobs' involvement at Apple has been similar to Gates' involvement at Microsoft of late: long range vision and direction, but not day to day? It seems to me that he keeps the CEO title so he can step in right way if he perceives Apple to be making misteps or deviating from his idea of where they need to go.
There's no finding involved. They knew they were scamming investors by cherry-picking the dates they back-dated to. All that's happening here is that they're confessing (sort of) to it, before the SEC exposes it, for damage control. Let's call it what it is: another corporate con-job.
Fair enough?
RSVP
are a scam on investors.
Welcome to Apple being popular. I make a good living writing application software for Windows - verbal abuse hurled at Microsoft and their products is so rampant here that I've been trying to stop reading Slashdot for a few years. The only way it's bearable is with AlterSlash - which filters most of the crap for you.
For example, several of the highest-modded comments to this story are beating on Microsoft and Windows Vista. A product that, if you'd take their attitude at face value - will apparently kill your pets, urinate on your carpet and set your back yard on fire when it's installed. In reality those posters will be using it sometime over the next few years, will forget what they were complaining about and they'll make something else up.
Do I think Apple stock is overvalued? Yes. But not any more than any popular technology company that's perpetually on the verge of exponential growth.
Very similar indeed. I'm told that the Germans have a saying, 'Die reinste Freude ist die Schadenfreude,' which merely says that Schadenfreude is the purest joy.
(The Germans, being a learned and on the whole sensible people, know that there are indeed other joys. Among these are guzzling beer, listening to really awful music at ear-splitting volume, and annoying the French.)
If this really bothers you, I'll take your apple stock.
For those determined to pillory Jobs for this, I might suggest reading this sfgate article which says, in part:
Valuation of stock options is and has been under a lot of debate recently. Apple looked over its books, discovered they had done something wrong according to current (and possibly past) accounting practices, and went to work to correct the problem.
Steve Jobs, who is richer than Croesus and really only bothers to count the number of digits on his bank statement, decided to dodge potential trouble more than TWO YEARS ago, which helps their position now.
Which part of this fits the "Steve Jobs is a greedy corporate raider" theory?
They screwed up. They admitted it. They'll take a hit. These aren't the droids you're looking for.
... grumble, grumble, grumble, mutter, mutter, Millenium... Hand... Shrimp, I tol' 'em, I tol' 'em.
he's not gay, but his gimp is!!
The scale of this is much smaller than Enron.
0 06/pi20060523_848601.htm
Here is an article that explains how the options backdating scandal started:
http://www.businessweek.com/investor/content/may2
To summarize, a finance professor decided to calculate the return on companies for the 30 days
after the award on of options on an unusual date for such award. He looked at 1668 such awards
and found that those stocks did 5% better than average for those 30 days each time.
Later, the Wall Street Journal calculated odds of 300 billion to one that that would happen by chance.
So a red flag can be raised on a company by mining this data, but it doesn't prove that
backdating took place. The SEC has decided to investigate a bunch of these companies.
It is likely that they will find wrongdoing in at least some of these cases.
One interesting note was that this practice has been greatly reduced as of 2002, when Sarbanes-Oxley
required reporting of options awards within two days of the award.
The details of how options are granted determines whether they have to be shown as an expense or not,
so some companies involved are having to restate earnings.
The largest impact I'm aware of is UnitedHealth Group, which according to the above article may
have to report $300 million in additional expenses.
Enron was fraud on a massive scale to hide tremendous losses.
Backdating options is a lesser fraud that puts more money in the pockets of executives.
It does not imply that the companies involved are not making money.
It also hasn't been proven for any company, yet.
"We can't solve problems by using the same kind of thinking we used when we created them." -- Albert Einstein
Jobs wasn't molesting that child, he was helping her adjust her panty strap. There is a big difference between molesting a child and simply having your hand on her ass.
Apple wasn't selling computers to the North Korean government, they were shipping them to northern China THROUGH North Korea and taking payment from the NK government as a convenience for the Chinese. There is a big difference between helping terrorist states and simply using them as a way to get product to those who need it.
Exactly - I'm at the edge of just giving up on reading Slashdot entirely with the retarded articles coming through lately that don't agree with my fanboyism and point of view. It's always had it to a small degree, but it's just getting worse lately because they actually printed something bad about Apple.
If they are selling all their stuff below cost them may be popular but the bussiness model would be broken.
But we don;t know at this moment in time because the accounting, in the words of Apple, can't be trusted.
IANAL but write like a drunk one.