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Wednesday, December 27, 2006, 01:00 pm PT (04:00 pm ET)

Apple option fears seem overblown, says analyst

Responding to a 4 percent drop off in shares of Apple Computer Wednesday morning, UBS Investment Research issued a note to clients in which it said fears over the company's ongoing stock-options issues appear to be overblown.

"Investors seem to be reacting to the mention of Steve Jobs," wrote analyst Ben Reitzes, referring to a widely syndicated news report that first surfaced on the Law.com website on Tuesday.

Reitzes said it makes sense that Jobs — who was reported to have recently hired independent legal counsel — would do so in the face of a possible criminal investigation "given his immense personal fortune and influence."

"We believe Apple seems to be on track toward putting options issues behind it and expect delayed filings within 2 days," the analyst wrote. "We should also receive more information regarding the probe and the potential impact on management."

Reitzes reiterated his "Buy" rating on shares of Apple, restating his belief that the financial impact of the options issues on the company will be minimal.

"We look forward to hearing about new products and prospects for revenue re-acceleration at Macworld," he wrote.

Shares of Apple slowly rebound throughout the day Wednesday, closing in the green up one cent to $81.52.