Slashdot Mirror

← Back to Stories (view on slashdot.org)

Apple Announces More Options Troubles

Posted by ryuzaki0 on from the setting-the-record-straight dept.

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."

3 of 159 comments (clear)

  1. Re:Steve Jobs leading Apple by deekline+wizard · · Score: 0, Flamebait

    Fair enough. That's parasitic behaviour and today it's rewarded mostly anywhere you go. How can we fix this?

  2. Re:Isn't this an issue for the CFO by Whiney+Mac+Fanboy · · Score: 0, Flamebait
    It's just another retarded slashdot tagline,

    No, its not. There's plenty of speculation outside of /. Look at this seekingalpha article:

    The risk for investors isn't only the reputational damage and potential fines; it's that CEO Steve Jobs may be forced to resign if it is proved that he knowingly took an option grant at below market prices. The stock impact would be dramatic because Mr Jobs has been responsible for turning around Apple over the last few years.

    Hard thing to prove I guess, but this is certainly a sad day for Apple.

    Also, this isn't an isolated case, but part of a much wider phenomenon.

    Please read this article, particularly:

    1) Everyone is NOT doing it. Even if another 200-300 companies come forward in the coming months as having committed some measure of backdating, that's but a small fraction of the overall public equity universe and hardly excuses the practice.

    2) Anything that misaligns company interests with that of its outside shareholders IS a big deal. While backdating wasn't technically illegal (as long as it was disclosed to shareholders and properly accounted for), the irregularities we're seeing are, at best, misaligning the motivations of management with outside shareholders and, at worst, far more nefarious. As a public equity investor, there is an implicit fiduciary responsibility that public company executives maintain a fairness to all their constituencies, backdating does not - in any way - do that.
    --
    There are shills on slashdot. Apparently, I'm one of them.
  3. Re:Who? by SeattleGameboy · · Score: 0, Flamebait
    C'mon, I am amazed at lengths Apple apologist will go to on this board.

    But whatever, go outside and start counting the number of iPods you see.

    Great, there are a lot of iPods. But what if the only reason iPods are popular is because they were sold at below actual cost? I am not saying that Apple DID sell iPods cost, but just saying "Their products are popular, so they cannot be cheating" is not a good argument.

    Also this is Apple who is doing their own internal investigation, not someone else who caught them in the act. This is them saying "wait, I think we made a mistake." From other comments I've read, this seems to not be a big deal (certainly not on the scale of Enron) and if Apple makes ammends and says basically, "we screwed up but now we've fixed it," I give them a lot of credit.

    I call SHENANIGANS!!! BULLSH!@T!!! Apple is reporting this now BECAUSE the heat is on. Many prominent high-tech firms have been exposed by press to have backdated their stock option grants. BECAUSE OF THOSE INCIDENTS, EVERY high-tech company is reviewing their OWN financial records for stock option backdating abuses, not just Apple. If Apple didn't investigate their own, they would have been exposed anyway. This is just Apple covering their tracks best they can, not because they are so "honest and forthright".

    PUHLEEZE... if they were REALLY honest, they would have reported this BEFORE the stock option scandal exploded. They didn't and they CERTAINLY do not deserve any credit.

    Look, Apple makes some great products. But that should not put blinds over our eyes when it comes to corporate abuse. Saying "they are not as bad as Enron" is not something that you should be proud about. Hell, even Microsoft is better than Apple on this issue - THAT is how BAD it really is.