Wednesday, January 03, 2007


Like most writers, I struggle with writer’s block. Right now, for example, my brain feels like a pint of Haagen-Dazs mint chip ice cream just removed from an expensive Subzero freezer. Eventually the stuff melts enough to let me scoop some out, but in the meantime there sits my slice of pie, naked and reproachful. As does my computer screen.

I envy the prolific writers at Microtune, Inc. (TUNE). In their last 10-K, the risk factors disclosure alone took up 18 pages. Understandable, perhaps, for a company that has enjoyed NASDAQ delisting, shareholder lawsuits, and a stock performance that looks like this.

On the last business day of the old year, Microtune unveiled the results of an internal investigation of its past stock option habits. The press release is so long and the story so packed with sordid details they ought to pitch it as an HBO mini-series.

In addition to the humdrum backdating practices followed at other firms - dating option grants weeks or months before the real grant dates - Microtune “regranted” a whole bunch of existing options at lower prices, pretended employees were hired and had options bestowed on them before they actually started working, let people play with exercise dates, gave former employees extra time to exercise options by keeping them on the payroll after they’d departed (recordkeeping a la Tony Soprano), changed performance goals after the fact, and fudged numbers in getting board approval.

Happily, the investigation concluded there was "no intentional wrongdoing" by anyone who’s now working there or serving on the board. It must be nice to have such a sunny view of human nature; the worst offenses seem to have pre-dated the arrival of the current CEO, James Fontaine, but many of Microtune’s directors were around for the earlier seasons of this drama. So when HBO options the show, you'll find me transfixed before my TV, eating pie a la mode.