This Day On The Street
Continue to site
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

Options Take Bigger Bite Out of Apple

The company has not officially said -- and Dowling declined to comment on -- whether it is investigating or has found instances of options backdating. However, Dowling did say that the impetus for the company's initial examination of its past grants was in reaction to "general industry concerns about historical options" practices.

Those "concerns," of course, are almost entirely related to backdating allegations.

When Apple first announced its internal probe, most investors seemed to be willing to give the company the benefit of the doubt , particularly because Apple said it had already cancelled the grant it gave Jobs.

But the news of a wider investigation and delayed filings could prove more troubling to investors. Jobs is largely seen as almost single-handedly reviving Apple, and anything that could end his tenure at the company could rock its stock.

And that's now a distinct, if slim, possibility -- depending on what Apple and, potentially, federal regulators uncover. At several other companies, including Brocade (BRCD - Get Report) and Mercury Interactive (MERQ), similar options probes have prompted the resignations of executives and board members.

Although Apple is the subject of several shareholder suits related to its options problems, the company has not said whether it is the subject of a regulatory probe. For his part, Dowling declined to say whether the company has been contacted by federal regulators.

However, when other companies have discovered problems with their grants, the SEC and other federal agencies have generally quickly followed with their own probes. A federal investigation, then, may be only a matter of time.

Though Jobs may have returned the options that are under investigation, he did receive something for them. In fiscal 2003, Apple replaced Jobs' cancelled options with 10 million shares of restricted stock worth $74.8 million at the time, which are now worth several times that amount.
2 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
Only $9.95
14-Days Free
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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $117.81 0.00%
BRCD $9.40 0.00%
FB $105.45 0.00%
GOOG $750.26 0.00%
TSLA $231.61 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs