This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Options Take Bigger Bite Out of Apple

Updated from 8:38 a.m. EDT

Options backdating at Apple Computer (AAPL - Get Report) was apparently much more prevalent than the company had led investors to believe.

And that's not good news for investors. Not only does it mean that investors will likely have to throw out Apple's past earnings reports, but also, it likely increases the possibility that Apple will draw the attention of federal regulators.

Even worse, the news also increases the odds -- however remote they still may be -- that CEO Steve Jobs may be forced to leave the company as a result.

In early Friday trading, amid a broad market surge, Apple's shares were off $1.48, or 2.1%, to $68.11.

The iPod maker warned investors late Thursday that its internal probe into its past options grants had uncovered evidence of additional instances of "irregularities."

As a result, the company plans to delay filing with the Securities and Exchange Commission its report for its just-completed quarter and said that it will likely have to restate some of its past financial reports.

The restated earnings would include options charges that the company hadn't previously accounted for, Apple said in a statement.

"The company has not determined the amount of such charges, the resulting tax and accounting impact, or which periods may require restatement," Apple said. "Accordingly ... 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."

Company spokesman Steve Dowling declined to say when the company expects to wrap up its investigation or what it had uncovered thus far.

"We're focused on resolving the matter as quickly as possible," he said.

Apple said late last month that it had found problems with options grants made between 1997 and 2001, including a one made to CEO Steve Jobs. The company said it had hired an outside counsel to investigate.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $128.45 -1.50%
BRCD $12.38 -3.60%
FB $78.94 -1.80%
GOOG $558.64 0.57%
TSLA $203.45 -1.80%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs