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  7. Apple shares fall 4% due to the announcement of irregularities with some stock options

Apple shares fall 4% due to the announcement of irregularities with some stock options

Apple shares fall 4% due to the announcement of irregularities with some stock options


On Friday, Apple shares fell 4% after the company announced Thursday that it has found irregularities in some of its stock option grants made between 1997 and 2001.

The irregularities were uncovered in an internal investigation, Apple said. Now the company has hired outside lawyers to conduct an investigation and has informed the US Securities and Exchange Commission.

“We believe that the potential financial damage penalties for any option irregularities will likely be limited and would not affect cash flow,” said Benjamin Reitzes, an analyst at UBS.

One of those stock options was Jobs’s, but it was voided, and Jobs did not benefit financially from it, according to Apple. “According to the company’s 2004 proxy statement, in March 2003, Mr. Jobs voluntarily terminated all of his exceptional options, excluding those granted to him in his capacity as director,” Reitzes said.

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In previous months, problems with stock options have been discovered in numerous high-tech companies. Some stock option assignments were backdated, or calculated at a low point in the company’s reserve, so the recipient could buy shares cheaply and reap a lot of money selling them.

Source: Macworld UK