All options, all the time

BusinessWeek’s Peter Burrows talked with options expert Erik Lie. Lie doesn’t think Jobs is necessarily out of the woods, but the Macalope found the last graph most interesting.

I then asked if he thought Jobs was getting an easier time than the dozens of other executives that have lost their jobs over the backdating scandal, simply becuase of Jobs’ celebrity and iconic reputation with investors and consumers. He said no. Rather, he pointed out his belief that there are many executives that have flouted options accounting rules that have not yet even been identified. “I believe there are potentially thousands of executives who have gotten completely off the hook. Because he’s steven jobs, he’s more in the spotlight….The media has been struggling to put a face on this scandal. If anything, he’s been treated unfairly relative to other people who have been completely unscathed.”

The Macalope has been harder on Jobs and Apple over the backdating of options than many other members of the Apple community, but he thinks Lie is absolutely correct here.

And you can scroll down for his “Martha Stewart” comment below as evidence that this isn’t a case of the tail wagging the Macalope.

They still do Friday fives?

It’s almost 2007 for crying out loud!

At any rate, Bill Bumgarner has tagged the Macalope (apparently a week ago) with the “Five things you don’t know about me” thing.

This may have been last Friday’s five but according to iCal it’s Friday again, so let it ride!

  1. While it’s a pain in the ass to type with hooves, it does mean that the Macalope is immune to carpal tunnel syndrome, as his “forearms” are made up with several phalanx bones that…

    Well, it’s complicated. Suffice it to say you won’t be seeing the Macalope wearing one of those wrist thingies.

  2. The Macalope once nailed Carly Fiorina.

    It was nothing to write home about.

  3. The Mac the Macalope primarily uses is an SE/30, but it’s a mythical SE/30 that can run OS X.
  4. The Macalope brews his own beer using a recipe taught to him by Dionysus himself. The secret ingredient? The dewy nectar that forms on Scarlett Johansson’s brow when she does hot yoga.

    Which is redundant as any yoga Ms. Johansson does is, by definition, hot yoga.

  5. Favorite Dr. Seuss character: Horton.

    You’d be surprised at how many people say Marvin K. Mooney. It’s weird.

Happy New Year!

Stand by your man

Apple Says Options Probe Exonerates Executives

Apple Computer today exonerated its chief executive, Steven P. Jobs, of any wrongdoing in a stock options backdating probe.

Sometimes it’s hard to be a woman
Giving all your love to just one man
You’ll have bad times

As a result of the internal investigation, Apple said it would record $84 million in expenses related to the options awards.

And he’ll have good times

The news helped push shares of Apple up more than 5 percent this morning to just over $85.

Doin things that you don’t understand
But if you love him
You’ll forgive him

“The board of directors is confident that the company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team,” the statement said.

Even though he’s hard to understand
And if you love him
Oh, be proud of him
Cause after all he’s just a man

But Mr. McGurn noted that Apple faced unique challenges.

“Apple is in a much more difficult position than other companies in the backdating morass, because a significant portion of its market valuation is based on Steve Jobs staying at his job,” he said.

Stand by your man
Give him two arms to cling to
And something warm to come to
when nights are cold and lonely

The language of Apple’s statement, coupled with the simultaneous resignation from the board of Fred D. Anderson, the company’s former chief financial officer, led analysts to believe that Apple and Mr. Jobs were attempting to distance themselves from any blame in the case.

Stand by your man
And show the world you love him
Keep giving all the love you can
Stand by your man

“Everything we know about Apple is that the compensation side is not something Jobs has ever been involved in,” Mr. Munster said. “The key thing, and the only thing Wall Street cares about, is whether Jobs will be impacted, and we don’t believe he will be.”

Stand by your man
And show the world you love him
Keep giving all the love you can
Stand by your man

It's a twister! It's a twister!

Wow, there’s been quite a bit of general silliness in the breathless reporting of Apple’s options issues in the past 48 hours.

Here’s a hapless ZDNet headline writer apparently mistakenly thinking the Financial Times had broken the news that Jobs had traded his options in (that’s been know for years).

Meanwhile Michael Gartenberg at Jupiter Research agreed to be interviewed on the subject under the condition he not be asked for a legal opinion or how these reports would affect Apple’s share price.

Guess what the first two questions were.

Many, many stories said that Apple’s board had not approved the granting of the options. That’s actually not known. The Financial Times report appears to be saying that the options were reported as having been approved at a board meeting that either didn’t happen or where the options were not discussed. It’s still possible that the individual board members were aware of the grant and approved it. Apple still would have violated the law, but it changes the nature of the intent.

The San Jose Mercury News has all kinds of wild speculation from legal experts on how the news of the forged documents points to criminal intent and how Steve Jobs is a great target for a prosecutor “eager to show that no executive is above the law.”

Hey, even the Macalope got in on it, speculating that the Republican SEC chairman would be tempted to go after Apple because Gore is on the board.

Ha-ha! What an idiot!

Heyyy, wait a minute…

Chump change?

Overnight the Financial Times reported that the forged stock option documents related to Steve Jobs’ grant of 7.5 million options in 2001.

The question now is, is it likely that Jobs knew that documents were being falsified for his granting of the 7.5 million options?

To the Macalope it seems highly unlikely that Jobs was not intimate with the details of his compensation, but most executives focus on “what am I going to get”, not the steps that might have been jumped over to get them there. Jobs, in particular, seems to be an individual who is comfortable as long as he knows he’s being handsomely rewarded for his Herculean efforts and only expects to make money if the company does well.

The company has stated that Jobs was not aware of the “accounting implications” involved. Is claiming something was approved at a board meeting when it was not an “accounting implication”? Possibly.

The Wall Street Journal’s Law Blog (paid subscription) asks today whether readers think Apple’s close-to-the-vest-approach or United Healthcare’s open approach is better. From an investor’s standpoint, clearly United Healthcare’s approach is better, but there are several hundred degrees of difference in magnitude between the two.

The United Healthcare executives were receiving salaries and colluding to cover up the backdating of hundreds of millions of dollars in stock options. Even if Jobs is implicated in the forging of the documents related to his relatively paltry 7.5 million options — options he was ultimately given a market value for but never actually exercised and no longer owns — it’s questionable if it’s material enough to cause him to have to step down.

Still, criminal proceedings in high-profile securities cases often turn on more than intent and the relative level of benefit (see: Stewart, Martha). Apple could become the poster child for stock option backdating prosecution and, call the Macalope cynical, but with an SEC chairman appointed by the Republican rival of a Democrat on the board of the company, it’s got to be a tempting target.


The Register had a piece a few days ago on why the Apple phone (née “the iPhone”) — you know, the phone the company has not announced and no one has seen and we don’t even know if it really exists let alone what its feature set or pricing will be — will most definitely, totally, absolutely, 100% with certainty fail.

The Macalope’s not going to link to it because there’s very little point in reading it (duh!) and, el Reg, if you’re going to be brazenly, stupidly, have no idea what you’re talking about contrarian, you should at least bring something fresh to the game. This territory has already been covered.


Holiday’s over. Here’s your rude awakening.

Apple reportedly falsified options documents.

Original piece by Justin Scheck with the allegations here.

It looks like the meat of the information relates to possible wrongdoing by former execs Nancy Heinen and Fred Anderson. While there are number of “if the SEC is going to go after Steve Jobs” type statements, there’s absolutely no information that implicates Jobs in the falsification of these documents.

While it will likely take some time — perhaps a matter of months — for the government to decide whether to file criminal charges against Jobs, the 10(k) filing on Friday should provide plaintiffs lawyers with some ammunition for their suits against the company.

Hey, if he’s done nothing wrong, it could take them years to decide as they would have to wait for him to do something wrong.

That is a rather irresponsible paragraph, unless Scheck knows something more that implicates Jobs. The only evidence provided is that he has retained his own legal counsel, which raises a few of the hairs on the Macalope’s velvety flanks, but is hardly damning given the fact that Jobs is personally named in the class action suit against the company.

We’ll know more on Friday.

UPDATE: Gene Munster of Piper Jaffray sez there’s less than a five percent chance Steve Jobs is at risk.

The Macalope likes those odds but how do you calculate that?

The Macalope holds an inconsequential number of Apple shares.

Light posting through the holidays

And the Macalope’s not just talking about himself, either. It’s like the whole Mac web has gone quiet (with the exception of the MacSanta folks, who the Macalope is pleased to promote for free).

Even the silly pundits seem to be on vacation. Although they seem to be on vacation all the time.

But, regardless, the Macalope can’t commit to posting anything as he’s on backup reindeer duty. Should any reindeer pull a hammy, the Macalope may be called to come off the bench and pinch fly. Flying’s not normally one of the Macalope’s powers, but such is the miracle of the holidays.

Plus, Kringle shoots you up with a bunch of steroids.

Man, you think baseball has a problem… but, of course, congress won’t touch that one.

So, if the Macalope doesn’t see you in the next few days, have a happy.

Bring it on

The Month of OS X bugs (antler tip to Daring Fireball), brought to you by the somewhat adversarial and misanthropic folks who brought you the Month of Kernel Bugs, is coming in January.

There is much about this to chap the average Mac user’s ass.

  1. The attempt to steal some thunder from Macworld by picking January.
  2. The fact that Apple will not be notified of the bugs before hand.
  3. The distinct odor of Artie MacStrawman in LMH’s assertion that “many” Mac users think OS X is bulletproof and “some” want it to look that way.

But the Macalope is willing to overlook all that because, ultimately, he believes this statement is true:

LMH said that while his upcoming project had the potential to at least temporarily make security more tenuous for the average Mac user, he believes that in the long run the project will improve OS X security.

Unlike the SecureWorks fiasco, this will happen in the open. The bugs will be published with sample code and Apple will have to respond with a fix. It’s not pretty, it’s not completely ethical, but like pulling a Band-Aid off really quickly, it’ll work.

If it happens at all. Somehow the SecureWorks “tell-all” never happened and, as Krebs alludes, Oracle likely shut down the Month of Oracle Bugs.

And the Macalope seems to remember something about someone at Oracle being friends with someone at Apple…

Never too late to look stupid

In a snippet entitled “Apple’s Collapse” (scroll to the bottom), Rob Enderle shows that not only does he have trouble with comprehension — as we’ve long known — he’s also just a very slow reader. While he apparently hasn’t caught up with Thursday’s RSS feeds, he’s not letting that get in the way of stepping into the wrong side of a controversy.

Forrester has to be having a fun week hearing from the Apple fans after it announced that iTunes music sales had “collapsed,” dropping 65 percent.

Enderle then discusses the implications of this without pointing out the sample size or even noticing that it has been directly refuted by comScore and Piper Jaffray.

This would be outrageous if his word counted for anything but, well, it doesn’t.

The Enderle Group: providing last week’s analysis today.