AAPL falls

Apple shares today fell by as much as 4 percent, following the company's announcement that it would probe into irregularities in previous executive stock option grants. Despite the drop in share price, one analyst predicts that Apple's announcement of the probe will bear no significant impact on the Cupertino-based company, according to Forbes.com. The questionable grants were made between 1997 and 2001, one of which was given to Apple CEO Steve Jobs, but was cancelled and resulted in no financial gain for the executive. "We believe potential financial damage [and] penalties from any options irregularities are likely to be limited and cash flow would not be impacted," said UBS analyst Benjamin Reitzes. "According to the company's 2004 proxy statement, in March 2003, Mr. Jobs voluntarily cancelled all of his outstanding options, excluding those granted to him in his capacity of director," Reitzes said.

Merill Lynch today analyzed Apple's probe, investigating the issuance of those grants under scrutiny by an independent counsel. The analyst firm currently marks Apple's volatility risk as "high," and maintained a "neutral" rating on shares.

The firm believes it may have discovered the grants in question, noting that 15 percent of the options (excluding those offered to Jobs, which were well above the fiscal year low) were granted at a share price less than 5 percent from the company's fiscal year low. Further still, 24 percent of options were granted at a share price less than 10 percent from the fiscal year low.

by MacNN Staff