Marvell option backdating
Those include Altera, Applied Micro Circuits, Asyst Technologies, CNET Networks (publisher of CNET News.com), Equinix, Foundry Networks, Intuit, Marvell Technology Group, RSA Security and Veri Sign.In addition, other companies, such as Apple Computer and The Cheesecake Factory have announced their own, preemptive investigations. Stock options give the recipient the right to buy a share of a company's stock at a price called the strike price, which is equal to the value of the stock on a certain date.Reyes' attorney has defended his client as wrongly accused, saying "financial gain is always the motive in securities fraud cases, and here there was none. The stock options are awarded just before news, usually positive, is announced.There is not even an allegation of self-enrichment, or self-dealing." Q: That's backdating. The shares increase in value and--presto--the options are worth more.If, for example, the strike price is and the shares now trade at , each option would be worth .(The options would be worthless if the stock fell to, say, .) Think of options as coupons you can sell.
Meanwhile, Silicon Valley's top lawyers are scrambling to assuage their clients' fears, and the U. Security and Exchange Commission has said that the investigation will expand beyond technology companies to other publicly traded outfits.
If you have a coupon to buy a Ferrari for 0,000, and the market price of the car is 0,000, your coupon is worth ,000.