Analyst: Apple Options Disclosure a Positive Step

| Apple Stock Watch

American Technology Research Analyst Shaw Wu sees Wednesdayis announcements regarding Appleis stock options investigation as a positive step towards a final resolution. Yesterday, Apple Computer announced that its investigation uncovered no misconduct by the current management team, but that there are "serious concerns" about two former officers.

Mr. Wu stated "While details such as the amount of non-cash charges have yet to be disclosed, we nevertheless view Appleis latest disclosures a positive in that we believe we are one step and perhaps two or three steps closer in reaching a resolution on its options investigation."

Apple has been conducting its own internal investigation with the aid of independent counsel to determine if the company improperly issued back dated stock options. The company has concluded that option grants from 15 dates between 1997 and 2002 were likely backdated to be beneficial to the recipients.

Although Apple CEO Steve Jobs was aware of some of the favorable option grant dates, it looks like he did not understand that they were improper, nor did he understand the accounting implications.

Along with the investigation findings came the announcement that the companyis CFO, Fred Anderson, had resigned. Mr. Wu speculates that he, along with former general counsel Nancy Heinen, could be the two management members Apple has "serious concerns" about.

In a worst case scenario where Apple is found guilty of improper options grants, Mr. Jobs will likely not be found liable. Mr. Wu commented "We do not believe Steve Jobs is liable, the reason being the compensation committee at Apple is run by an independent board that is not comprised of employees of Apple."

Mr. Wu is maintaining his "Buy" rating and target price of US$91 for Appleis stock.

Apple is currently trading at $75.73, up 0.35 (0.46%).

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