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Friday, August 11, 2006

Apple Sauce: Is Apple More Likely To Be Delisted?

Stocks: (AAPL)(BRCD)(CMVT)

247WallSt. has already written that Apple's shares could face delisting.

The possibility increased today. Apple reported in an SEC filing that it would have to restate its earnings, perhaps significantly, and that the submission of it 10Q for its period ending July 1 would be late. Further, the company said that it did not think the filing would be done before the 5 day grace period that exists after the normal deadline.

With the investigation into Apple's stock option dating the company is now facing two critical issue. The first is the the Nasdaq generally sends a delisting notice to companies that file a 10Q or 10K late. The companies have the right of appearl, but Apple may not be able to file its document before that appearl process ends.

The second, more problematic issue is whether any members of Apple's senior management were involved in changing options dates. Some former managers at Brocade are facing criminal charges. The same is true at Comverse Technologies.

Apple does not need these headaches now. There is some doubt about how the company's new Intel-based PCs are selling and the company has not release significant upgrades to its iPod that might increase unit sales.

The next few weeks are going to be very tough for Apple investors.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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