Apple says “OK, now you can worry about those options”
A couple of weeks ago, Apple Computer announced a better-than-expected quarter, and also mentioned that they didn’t expect any “material adjustments” to result from their stock options accounting investigation. Since then, the share price has been rocketing from the low 50s up to touch 70 today.
After the close today, they mentioned that they will restate earnings back as far as 2002 and will delay filing their 10-Q. Oops.
Apple Computer Inc. (NASDAQ:AAPL - News) said on Thursday it would likely need to restate earnings and will delay filing its quarterly report because of additional irregularities it found in its accounting of stock options and its shares fell 6.6 percent.
Apple also said in a SEC regulatory filing Thursday that all financial communications issued since September 29, 2002, should not be relied upon. The irregularities are related to the issuance of stock option grants made between 1997 and 2001.
For reference, here’s the Apple 3Q06 press release, July 19, 2006:
As previously announced, an internal investigation discovered irregularities related to the issuance of certain stock option grants made between 1997 and 2001. A special committee of Apple’s outside directors has hired independent counsel to perform an investigation and the Company has informed the SEC. At this time, based upon the irregularities identified to date, management does not anticipate any material adjustment to the financial results included in this earnings release. However, if additional irregularities are identified by the independent investigation, a material adjustment to the financial information could be required.
At one point I used to believe in buy-and-hold, longer term investing based on fundamentals. Unfortunately, it can be difficult to discern what the fundamentals actually are, and how the stock markets will react to them.
In the current market conditions, I’m doing much better as a short term trader than when I try to hold longer term positions.
Update Friday 08-04-2006 14:33PDT - Interesting anecdotes on Apple financial culture from Applepeels.
Tags: apple, aapl, stock, trading, investing, options, accounting, finance
