Apple CEO Steve Jobs owns about $2.5 billion worth of Apple stock. But he would own about $13 billion worth of Apple stock if it weren’t for a huge mistake he made back in 2003, MarketWatch’s Brett Arends reports.
In 2003, Apple (AAPL) stock had declined from a peak $36 per share during the tech boom to about $7.
This put options granted to employees near the peak deeply underwater.
So, to keep these employees motivated, Apple’s board gave Steve Jobs and every other Apple employee the opportunity to exchange the underwater options for new, fewer options at a much lower strike price.
Steve took the leap and canceled all his options for a much smaller number of them at a lower price.
With Apple stock now trading above $250 – well above the strike price of all those options Steve gave up – Steve, with one pen stroke, lost himself about $10.3 billion in future gains.
Brett calls it, “the dumbest trade ever.”