The stock option mess is bruising two of the biggest tech brands to date — Apple and Steve Jobs. Apple just released a statement that says due to “irregularities related to the issuance of certain stock option grants made between 1997 and 2001″ the company will likely restate past financial statements.
Apple says it announced an internal investigation into company stock option irregularities in June but has now found additional evidence to lead to a possible restatement. The company didnt give a date or amount of the restatement, but said as a result of an ongoing investigation, it will delay the filing of its Form 10-Q for the quarter ended July 1, 2006.
A line that should give investors heartburn: “The Company today filed a Form 8-K stating that the financial statements and all earnings and press releases and similar communications issued by the Company relating to periods commencing on September 29, 2002 should therefore not be relied upon.” Thanks, good to know.
The problematic grants could even touch the chief himself. This stock option debacle just keeps getting bigger and bigger.
4 comments so far
8:17 PM PT
This just goes to show that Steve Jobs and his cronies are not the “goody two shoes” that many people think he and Apple are (as we oft hear of people comparing Apple to Gates’ “evil empire”). The fact is, most humans can not be trusted when money shows up at their front door.
10:08 PM PT
Will AAPL be turned into applesauce at 9:30EST? ;). This is big news for a stock that has been on an absolute tear recently.
“The Company has not determined the amount of such charges, the resulting tax and accounting impact, or which periods may require restatement.”
Down 6.6% ECN.
6:34 AM PT
This is so widespread, I have to wonder: did most of these executives actually know about the backdating? was this some sort of standard practice in accounting departments? Was there some kind of groupthink consensus amongst tech industry execs or CFOs that this was an ok manuever? I’m also wondering if this only effects the top execs or if this was a practice that extended to all staff granted options. Frankly, if someone had monkeyed with the date on my options grants at tech companies, I never would have noticed - it wouldnt even have occured to me that the grant date or strike price could be incorrect.
8:11 AM PT
the stock will bounce back on monday after the keynote. at least that’s what i hope ;)
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