Sr K, of all the people on SI you are the most singularly focused on stock options expenses. These are non cash expenses that are not worth much. Here is apples restatement:
In its full-year financial report filed with the U.S. Securities and Exchange Commission, which was delayed due to the options probe, Apple said earnings for fiscal years 2006, 2005 and 2004 will be lowered by $4 million US, $7 million US and $10 million US, respectively.
OK so for the largest year we are talking a whopping 10 million in NON CASH expenses that was incorrectly stated due to this rule. Whoopee. The way the DOJ couches this "scandal" is as if it is some huge issue for shareholders when in fact it is obvious from the amounts it is a triviality.
Even Brocade, the company the DOJ chose to target because it had a highly volitile stock price (which is what causes these "expenses" to balloon) restated between 8 and 10 million per quarter of non cash expenses due to backdating employee options to the low across a quarter.
Brocade apparently had other issues in that they had some employees on leaves whose stock was allowed to vest (this is not backdating) and that needed to be restated which caused their totals to be more like 20mm of options expenses restated, and the government DISINGENOUSLY included these "other" expense totals in their backdating PR to get the public riled up about backdating. Here is the DOJ PR, read for yourself, where did they say backdating was a fraction of the total restatement - nowhere. And btw BRCD is a 700mm company anyway so even these totals are insignificant.
sec.gov
Any company doing over 500mm revenue per year that needs to restate 10mm in non cash expenses is hardly negligent or criminal give me a break. I got news for investors here. Literally EVERY non cash expense on the books of EVERY company is potentially off by 10mm a quarter. If you think depreciation is accurately reflected against everybodys books within a million or so- WRONG. Or any non cash expense. If you can't handle these realities, go buy real estate or something you can see/touch.
Just the fact that you are so singlularly focused on this is an indication that you are like these juries- you are pissed off about stock options and reacting with an emotional slant. That is what the DOJ is playing off.
I will remind anyone that applauds this that Phil Spector is likely going to walk while some CEO who signed a 10K with a few million of misrepresented stock options expenses got 10 felony counts and hard time. GROW UP. |
