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AAPL Stock: 116.42 ( + 0.11 )

Printed from http://www.macnn.com

Apple execs profit from massive AAPL climb

updated 12:30 pm EST, Wed February 9, 2005

Execs profit from AAPL

As Apple's stock climbs to record levels, company executives are cashing in on stock options and making significant profits. Phil Schiller, Senior Vice President of Worldwide Product Marketing, has made around $2.3 million, according to estimates. Last week, Schiller sold 75,000 shares, which he purchased at $47 per share. Schiller sold his shares at approximately $78 on February 4th. Last fall, Schiller made over $8 million when he exercised 286,000 employee stock options. Jon Rubinstein, Apple's Senior Vice President of Hardware Engineering, sold approximately 9500 shares of stock on January 27th, worth $688,000. Last month Rubinstein sold 250,000 shares of employee stock options, for a profit of over $13 million. Apple stock yesterday hit a new all-time high of over $80.




by MacNN Staff

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  1. jrome

    Joined: Dec 1969

    0

    Exercise options

    Please correct the many errors in the above article. Here's the first half of what you wrote:

    "As Apple's stock climbs to record levels, company executives are cashing in on stock options and making significant profits. Phil Schiller, Senior Vice President of Worldwide Product Marketing has profited approximately $2.3 million, according to estimates. Last week, Schiller sold 75,000 shares, which he purchased at $47 per share. Schiller sold the options around $78 per share on February 4th. Last fall, Schiller made over $8 million when he exercised a 286,250 employee stock."

    The 2nd sentence is worded badly in 3 instances: first, you forget the comma after Marketing which should denote the phrase end; second, "profited approximately $2.3 million" is awkward at best-- "earned profits of $2.3 million" would be better; third, using "approximately" & "estimates" in the same sentence is redundant.

    It would also be helpful if you were more clear how Schiller acquired the 75,000 shares-- were these purchased on the open market for $47 or did he exercise options with a strike price of $47? Also, he didn't sell the options at $78/share; rather, he sold the stock at $78/share. Based on these three sentences, I'm able to piece together the facts, and rewrite it in a way that is both more clear and concise:

    "Phil Schiller exercised 75,000 options with a strike price of $47 per share and sold them for $78 per share, earning a profit of $31 per share, a total of approximately $2.3 million in profits."

    "... when he exercised a 286,250 employee stock." makes no sense. Instead write, "... when he exercised 286,250 employee stock options." The remainder of the article is mostly clear, although it would better inform the reader to note how Rubenstein acquired the shares he sold (options, grant or purchase) and what the strike price was of his options.

  1. theduffsronme

    Joined: Dec 1969

    0

    Re: Exercise options

    Somebody has way too much time on his hands.

  1. riverfreak

    Joined: Dec 1969

    0

    good for them

    they should enjoy the fruits of their labor. Might as well cash in, because -- let's face it share prices are almost purely based on hype and speculation, not assets, performance, debt, earnings, etc.

  1. Sosa

    Joined: Dec 1969

    0

    Good points jrome


    On a different point though, these guys seem to be making a ridiculous amount of money. While I want Apple to succeed, how did these guys aquire so much stock? They they invest it themselves, and thus suffered risk, or are these company handouts?

  1. mugwump

    Joined: Dec 1969

    0

    humph

    The first poster should go back to his financial message boards and continue to waste his days away pumping his latest Viagra stock.

    Regarding the share prices being based on hype and speculation -- one thing you learn in the top business school in the US is that any active marketplace is very efficient.

    No matter what individual is hyping or reading charts about a particular company, any high volume of money sets the correct price for what a company is worth, by considering all known public knowledge and pricing it in to a far greater extent than any individual can claim to do. In fact it's so efficient that is very rare for any money fund to beat the market over the course of 10 years.

    Sure a lower volume stock can be manipulated by some big money plays, but after removing such daily volatility, the overall price is exactly correct for that traded item. Now, we all see then the public information rapidly shifts in a short amount of time, in panics and bubbles, but the rest assured a healthy financial arena is the best indicator for a company or an economy, better than any pundit.

    Same goes for democracies -- the decisions are made by the large group far exceed any individual ability to process all known information.

  1. MAlan

    Joined: Dec 1969

    0

    share prices


    >
    >
    Regarding the share prices being based on hype and speculation -- one thing you learn in the top business school in the US is that any active marketplace is very efficient.

    No matter what individual is hyping or reading charts about a particular company, any high volume of money sets the correct price for what a company is worth, by considering all known public knowledge and pricing it in to a far greater extent than any individual can claim to do. In fact it's so efficient that is very rare for any money fund to beat the market over the course of 10 years.
    >
    >

    This is totally wrong. The efficient market hypothesis is totally baseless. Top business schools teaching this is akin to top medical schools in the 19th century teaching doctors to 'bleed' patients. Efficient market hypothesis flies in the face of history.

    The first poster was more correct...share prices are based on hype and speculation but there is a better description available. Share prices are based on the mass psychology of the society in which the market is based (which is very related to hype and speculation). The fact is that the stock market is a robust fractal. This has been proven by Elliotwave International (www.elliotwave.com) and a related organization (http://www.socionomics.org/). They proved it by generating an 11 rank fractal based on the model they use and did a correlation to real markets. The correlation was better than statistically significant it was a home run when it comes to statistics.

    The father of chaos theory (Mandelbrot) has also proven the markets are a fractal.

    There is no way the market sets the 'right' price for companies. There were dot coms at the height of the boom that were worth more than GM! A similar situation exists with Google right now.

    What about cases like Global Crossing where their creditors own a critical portion of the fiber optic infrastructure that the US relies on. It is so critical that the US govt won't allow any significant part of them to be purchased by China. But their stock price went to zero. Same with worldcom...ever heard of UUnet. It is 50% of the backbone of the internet for goodness sake owned by worldcom but that stock went to zero too.

    Your money fund argument also falls apart when considering other time frames. In fact anyone can pick any short amount of time to base arguments on that has little to do with what sets the price of a share of stock. I'll prove it to you go to finance.yahoo.com and get a chart of the Dow from 1929 to 1960. The stock market topped at ~390 in 1929. It took until ~1954 for the dow to top its 1929 peak. Thats 25 years where if you owned a money fund that held short term Tbills you would have beaten the stock market. Cash was king during the deflation of the 30's.

    Another example is the year 2000 - O

  1. MAlan

    Joined: Dec 1969

    0

    share prices 2

    My post was cut off...

    Another example was the year 2000 - October 9, 2002. If you held a money market fund then you would have beaten the stock market.

    Remember just because schools teach something doesn't mean they are always right. Especially when it comes to economics.

  1. MAlan

    Joined: Dec 1969

    0

    elliot wave intl

    By the way don't get caught up in Elliotwave internationals hype either. They are correct on some fundamental things but when it comes to applying the theory to timing markets they fall short of the mark. They are good on the long term but not good on the short term. My impression is that dow theory is better at issuing market timing decisions.

  1. MAlan

    Joined: Dec 1969

    0

    inefficient markets

    The fact is that we are emotional beings. Efficient market hypothesis assumes that everyone operating in the market is being totally rational all of the time which is b.s.

    Have you ever owned a stock? Owning a stock and what you go through when it goes up and down is an emotional experience believe me. People by and sell based on how they feel at any given moment not what is known about a company.

  1. jrome

    Joined: Dec 1969

    0

    Holy c***!

    I may have way too much time on my hand (no idea what that has to do with Viagra), but it's nice to see that MacNN quickly edited their article to make it easier to read and more accurate. Good job!

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