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 Trade Cost Steve Jobs $4 Billion

Jobs at the time was holding 15 million options at a strike price of $9.15, which means he could make money only if the shares rose above that level, plus another 40 million options with a strike price of $21.80.

The share price by early 2003: around $7.50.


So Jobs and the board reached an agreement. He would throw away all those apparently worthless options in return for 10 million actual Apple shares. (This information comes from the company's public filings. The prices have been adjusted to reflect Apple's 2-for-1 stock split in 2005.)

At the time, it looked like he was giving up nothing and getting $75 million in return. And, as he had rescued the company from oblivion, who would argue he didn't deserve it?

The company explained at the time that Jobs was not merely motivated by self-interest. "Mr. Jobs felt strongly that this would more effectively build shareholder value," it said in a public filing, "by reducing the company's overhang and by providing additional shares that could later be granted to employees whose contributions are critical to the long-term success of the company."

Indeed. Of course, the same would also have been largely true when Jobs had accepted the options in the first place.

Irony: The period when he made this decision, early 2003, was to prove the post-bubble low point for Apple stock. It was just before it began its monumental run.

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 $93.74 0.00%
DIS $103.26 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs