- Summary: Apple Computer, which last month acknowledged 'irregularities' in option grants issued between 1997-2001, has now found 'additional evidence' that will likely require the company to both restate past financial results and delay filing its current quarterly results. A terse press release issued last night did not provide details on the exact nature of the options mishandling, but indicated that an independent counsel investigation that its board initiated has found unaccounted charges for option-related compensation expense. In its June announcement, Apple noted that 'one of the grants in question' was issued to CEO Steve Jobs, but that it was later canceled and 'resulted in no financial gain' to Mr. Jobs. Apple stock dropped in after-hours trading 6.6%.
- Comment on related stocks/ETFs: Here's the press release from last night; the SEC 8-K filing, warning on the restatement and this quarter's delay, is still not up on the SEC's Apple page. Apple is the highest-profile tech stock among more than 80 to be hit by the options scandal, and as noted when the company first acknowledged the issue, the risk is not only for sentiment damage and fines -- it's altogether possible that Steve Jobs or other key Apple execs could be forced to resign if it's found that they knowingly took options grants at below market prices. Today's Bloomberg piece on the issue notes that shareholder lawsuits are already on file in California alleging Jobs took an improper 7.5 million share grant. The Journal article notes the possibility of Apple facing Nasdaq delisting if this quarter's filing doesn't arrive in time. Jason Wood, meanwhile, brushes aside claims that it's no big deal since 'everyone's doing it.' Here's our updated options scandal 'scorecard' summarizing the damage to date.
Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):