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Did Apple's Scott Forstall Really Just Walk Away From Hundreds of Millions of Dollars?

NEW YORK ( TheStreet) -- Back in May, financial journalist Heidi Moore tweeted something about Scott Forstall selling a bunch of his Apple (AAPL - Get Report) shares.

In fact, he sold 95% of his position. That netted him $38.7 million (about $585 per share, or 3% below where it closed on Friday).

Heidi tweeted some commentary at the time with a link to the story along the lines of: "Wow, this is not a good sign."

It turns out she was right.

As someone who owns the stock, and a fan of the existing management team, I remember wracking my brain at the time for what Forstall might have been thinking.

I know executives have all sorts of reasons for selling stock on the open market. It's usually not a good long-term signal for where the stock is going -- unless it's Angelo Mozilo at Countrywide in 2007 -- and says more about their personal financial needs. Academic research has shown that stock purchases by insiders are much more predictive of future stock movements than stock sales.

What's more, Forstall still had 100,000 restricted stock units (RSUs) granted in 2010 that were scheduled to fully vest in 2014. And last year, after co-founder Steve Jobs died, Apple's board approved handing out even more restricted stock units to the management team to keep them in place. As part of that, Forstall, 43 years old, got 150,000 more RSUs. Half of these were to vest in 2013. The remainder vested in 2016.

His sale of 95% of his shares in May were for 64,000 company shares. So, even though almost $40 million is a lot of money, his 64,000 shares were only 20% of his shareholdings when you took the remaining unvested RSUs into account.

So I think I tried to reason with Heidi along those lines that Forstall's sales were no big deal in that context.

But I may have been really wrong.

Maybe the stock sales did signal Forstall was really upset with how things were going under Tim Cook's leadership in the post-Jobs era.

The spin coming out of Apple since Forstall was fired was that the decision was only recently made. So presumably Forstall was planning on staying. And he gave a strong presentation at WWDC in June, notably touting the coming Apple Maps and the updated version of Siri (to big cheers at the time). On the surface, he didn't appear to be "checked out."

It's also interesting that Bob Mansfield announced his retirement (at 51!) in June. Now he's back and promoted while Forstall's gone. Although everyone talks about bad blood between Jony Ive and Forstall, maybe Mansfield was also upset with him.

We will never know, unless CEO Tim Cook or Forstall reveal the full story.

But it is amazing that Forstall walked away from his unvested RSUs through all this. He'll get some severance to ease the pain, but he's left behind 350,000 RSUs when he left Cupertino, Calif. At current prices, that's worth $210 million. If Apple goes to $1,650 by 2015, as I think it will, he will have walked away from nearly $600 million.

I'm sure he's going to be hotly pursued by all of Apple's competitors and land a fabulous stock package. However, I'm sure no one will give him half a billion dollars.

Whether Forstall or Cook is to blame, or a combination of both, I would have worked a little harder at making a great job at a great company work if I were Scott Forstall.

The author has a position in Apple.

Eric Jackson is founder and Managing Member of Ironfire Capital and the general partner and investment manager of Ironfire Capital US Fund LP and Ironfire Capital International Fund, Ltd. In January 2007, Jackson started the world's first Internet-based campaign to increase shareholder value at Yahoo!, leading to a change in CEOs in 2007. He also spoke out in favor of Yahoo!'s accepting Microsoft's buyout offer in 2008. Global Proxy Watch named Jackson as one of its 10 "Stars" who positively influenced international corporate governance and shareowner value in 2007.

Prior to founding Ironfire Capital, Jackson was President and CEO of Jackson Leadership Systems, Inc., a leadership, strategy, and governance consulting firm. He completed his Ph.D. in the Management Department at the Columbia University Graduate School of Business in New York, with a specialization in Strategic Management and Corporate Governance, and holds a B.A. from McGill University.

He was previously Vice President of Strategy and Business Development at VoiceGenie Technologies, a software firm now owned by Alcatel-Lucent. In 2004, Jackson founded the Young Patrons' Circle at the Royal Ontario Museum in Toronto, which is now the second-largest social and philanthropic group of its kind in North America, raising $500,000 annually for the museum. You can follow Jackson on Twitter at www.twitter.com/ericjackson or @ericjackson.

You can contact Eric by emailing him at eric.jackson@thestreet.com.

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