Jittery investors sliced 6-8 per cent off Apple's share value overnight in response to news of further stock option irregularities.
The company last night warned that it may have to restate its financial results all the way back to September 2002 as the extent of its internal stock option fiasco comes to light.
The company said last month that an internal investigation had uncovered problems with some stock option grants made between 1997 and 2001. On Thursday, it said it had found additional evidence of irregularities. Because of the new discoveries, Apple is likely to have to restate past financial results to record non-cash charges for the expense of making stock option grants, the company said
Because of the ongoing investigation, the company also will delay the filing of its Form 10-Q for the quarter ended July 1 to the Securities and Exchange Commission (SEC).
It's a problem across Silicon Valley. Federal investigations have ensnared more than 80 companies, including Home Depot, and may involve dozens more, according to US officials, securities lawyers and executive-pay specialists. The probe has turned into the country's biggest investigation of corporate malfeasance since an inquiry into improper mutual-fund trading three years ago led to $4.3bn in penalties.
Stock options enable the holders to buy a specified number of the company's shares at a later date, usually at the price when the shares were granted. Executives receiving options make higher profits if the shares are granted at a low price.
Broadcom, a maker of computer chips, said on July 14 it will restate results and incur costs of $750m to account for options granted from 2000 to 2002.
Apple shares fell to $65 on extended trading last night, down 6.6 per cent, shedding $4.59. Reports from the German stock market indicate an 8 per cent decline on trade there this morning.