Apple Computer to appeal to Nasdaq to keep listing

August 12, 2006|By DAWN C. CHMIELEWSKI | DAWN C. CHMIELEWSKI,LOS ANGELES TIMES

Apple Computer Inc. said yesterday that it would appeal to Nasdaq officials to keep the company's stock listed on the exchange while an investigation into the timing of option grants delays filing of quarterly financial reports.

The company formally notified the Securities and Exchange Commission yesterday that it would not meet the deadline for filing its fiscal third-quarter results. That triggered a letter from Nasdaq that the company no longer met the exchange's listing requirements.

Companies that trade on the technology-heavy Nasdaq have 40 days after the close of a quarter to file their reports with the SEC.

Apple warned investors last week that it would delay filing for the quarter that ended July 1 as it investigates irregularities in option grants.

The maker of iPods and Macintosh computers is the most prominent of the dozens of companies under scrutiny for their handling of options. Some allegedly distributed or dated options when their stock dipped so recipients could reap higher potential payouts.

Few who track Apple expected Nasdaq to delist the company's shares, which will continue to trade while the exchange's officials decide how to proceed.

Apple spokeswoman Katie Cotton said a letter from Nasdaq to the company was a procedural notification sent whenever any company misses a quarterly or annual SEC filing.

"We fully anticipated receipt of this letter," Cotton said. "We'll file our [quarterly report] following completion of our independent investigation. We're focused on resolving these issues as quickly as possible."

Nonetheless, some analysts said uncertainty over Apple's financials could spook investors.

"I think it certainly has a psychological impact, in the sense that where there was certainty with respect to past numbers there's now uncertainty," said Charles Wolf of Needham & Co.

"Given that investors are risk-averse, it's clear that Apple's decline in share price from a week ago is at least in part a result of this options examination at Apple."

Apple shares fell 42 cents to $63.65 yesterday. They ended last week at $68.30, well off their 52-week high of $86.40 in January.

Apple said in June that an internal investigation had found irregularities in stock option grants made from 1997 through 2001, and that its outside directors had hired an independent counsel to conduct an investigation.

It announced its third-quarter results, reporting the second-highest quarterly sales and earnings in the company's history, on July 19.

Dawn C. Chmielewski writes for the Los Angeles Times.

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