Apple managed to beat expectations with its latest financial results, boosting its profit by 27 per cent and setting a new record for Mac sales. Everyone seems pretty excited about the whole thing, and happy to talk about how great the iPod and iTunes are, etc. If they mention it at all, most news stories mention the whole options backdating problem way at the bottom as a kind of throwaway. Most blogs don’t mention it at all.
In fact, the options-backdating issue might as well not even exist as far as most coverage of Apple is concerned — and that goes for much of the mainstream media as well as the blogosphere, where Apple fandom reigns supreme. Blogging Stocks is about the only place that has consistently written about the issue in depth (and Soxfirst), instead of just worrying about whether some bad official will make Steve Jobs go away and kill the golden goose.
Can you imagine what kind of stink there would be if Microsoft was involved in something like this? People would be burning Steve Ballmer in effigy (ok, they already do that, but you get my point). But because it’s Apple, the assumption is — if anyone even bothers to think about it — that it’s some kind of misunderstanding, a book-keeping irregularity that Steve couldn’t possibly have known anything about.
Is that the case? No. Apple has said that Steve knew about it, but didn’t benefit from it. Is that really supposed to make it all go away? We’re not talking about Enron-style arcane book-keeping tricks here — we’re talking about pricing stock options just before blockbuster quarterly results are issued, so that they instantly soar in value, and back-dating them in other cases to ensure a big payout.
Sure, everyone else was doing it too, but that doesn’t make it right. Apple has been getting a free ride on the whole issue, as far as I’m concerned. I guess the legendary Steve Jobs’ “reality distortion field” extends pretty far.