January 23, 2007
The sound of one shoe dropping
I'm running a short position in Apple stock and wrote here "The optics of the story are awful - backdated options grants, fictitious board meetings, Apple apparently lying outright to say that Jobs derived no value from the operation - but the market wants Jobs to get away with it (so do I in my heart) because he's so admirable...."
The market's discounting of Jobs's vulnerability was founded on an Apple board report exonerating Jobs, but if there's a smell test for whitewash, that report wouldn't pass it, tho the whitewash was applied by the Inventor of the Internet himself who may now be in line to be prosecuted. Anyone who bought Apple stock after the Gore report was published, may have a powerful case.
Since I placed my short last week the stock has dropped 10%, but after last night's close it emerges that the feds have questioned Jobs. Now the market may shrug this off, fairly reasoning that this Justice Department, which wouldn't prosecute Sandy Berger, lacks the balls to apply the law to Steve Jobs or Al Gore. But, you know what, greed is fully priced in Apple's stock and fear is a bouncing baby. Steve may look fetching announcing new products in an orange jumpsuit. Al Gore would look more fetching.
Why I love Steve Jobs (14 minutes).
UPDATE: Another day, another dollar (down).
Tomorrow's Times (London) runs an Apple story, US investigators condemn Apple's options inquiry. Extract - "An SEC source said: “To have a representative from the Department of Justice — a criminal prosecutor — attend an interview with a company CEO is a very serious matter. This is not a polite request for information. The way the interview was conducted and the way the investigation seems to be moving forward [suggest] that Apple has a lot more explaining to do before the authorities will even begin to be satisfied.”"
The Times (New York) website runs an Apple story about designs for mythical Apple products. Also a story in the Tech section about how HDTV is showing up too much detail in porn movies. Now why would the omitters of truth at the NYT be playing down what may be the biggest business story of the year ?