AAPL Stock: 126.41 ( -2.13 )

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Apple: stock issues may affect earnings

updated 10:10 pm EDT, Thu August 3, 2006

Apple to restate earnings

Apple today announced that it has discovered additional evidence of stock grant irregularities--in addition to the previously announced stock grant irregularities that has led to atleast two investor lawsuits. In light of the new evidence, it said will likely need to restate its historical financial statements to record non-cash charges for compensation expense relating to past stock option grants; however, Apple said it has not determined the amount of such charges, the resulting tax and accounting impact, or which periods may require restatement.

Accordingly, Apple on Thursday filed a Form 8-K stating that the financial statements and all earnings and press releases and similar communications relating to periods commencing on September 29, 2002 should therefore not be relied upon. Apple's stock has been climbing on a renewed outlook for the future, hopes of a new iPod nano, and rumored announcements at next week's Worldwide Developer Conference in San Francisco as well several analyst upgrades.

As Apple noted, 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. In addition, Apple has informed the SEC. As a result of the ongoing investigation, the company said it will delay the filing of its Form 10-Q for the quarter ended July 1, 2006.

by MacNN Staff





  1. Kaon

    Joined: Dec 1969


    how will this affect ..

    If the historical earnings, tax and accounting records need to be restated, how is it going to affect Apple's future earnings?

  1. jarod

    Joined: Dec 1969



    It won't affect any future earnings. All this will do is readjust numbers. For example, if Apple at one point said it made 200m profit, that number might be adjusted to 175m, and so forth. Why investors overreact to such news and lose their money is way beyond me. Markets clearly overreact to news like this. Apple or not; in general, 95% investors are not usually the brightest of people and 9/10 end up losing money by making irrational decisions at exactly times like this.

  1. jarod

    Joined: Dec 1969




    Just heard this: a foreign mid-east investor is planning a royal purchase purchase of Apple stock in light of recent news.

    "Apple Computer's fundamental business is one with tremendous opportunity and I feel that the current stock price symbolizes a rare and attractive buying opportunity. I don't believe that Apple Computer will have any illegal implications; if it did, it's overall business model would have shown signs of weakness a long time ago."

    Anyone wanna guess who that might be!!?? My guess would be that prince Al-Waleed that purchased Apple stock many years back when it was still like $10? :D :D :D

    There is sign of intelligence afterall! There is hope it seems!

  1. aesculanus

    Joined: Dec 1969



    prehours trading broke open at 4am this at $64. these stupid asses think they're so clever selling early pre-market only to final every other stupid a** doing the same think and lose $5 a share on it.

  1. Timothy Flint

    Joined: Dec 1969


    It's all in the timing

    Announcements about stock are carefully timed by all companies. I suspect that Apple wanted to get the bad news out at the best time, so the stock would drop before new product introductions on Monday. I'll bet the rumor about the big mid-East investor came from Apple's PR department as well. It's not WHAT is announced. It's WHEN.

  1. climacs

    Joined: Dec 1969



    that's why you dump bad news on Friday. There's only one day to report on it, most people have their minds on the weekend, and no one's going to cover it in more depth over the weekend. The White House isn't the only place that does that.

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