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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (15056)	8/5/2002 9:32:34 AM
From: TimbaBear	of 78687

Jurgis: Jim, Sorry, no go. Dell has put obligations to buy shares... at $45 or so. And they have to do this whether they want or not - the put buyers are not going to allow puts expire in money. Dell can then retire the purchased shares, but the problem is they would be paying $45 and not $24 per share. Below is a link to the historical prices for DELL for the period of their last 10K (02/01/01--01/31/02). It appears to me that, during this period, they never once closed above $30.00/share so your assessment appears to be validated. If DELL could simply fulfill the put obligation with shares, then their AVERAGE cost to buy the 68 million shares would have been more reflective of the market pricing instead of the $44.12/share it was (3 billion/68 million). This historical look at prices and what it reveals about the true nature of their liability really makes it seem to me like they grossly misled the shareholders when they said: "...The outstanding put obligations at February 1, 2002 permitted net share settlement at the Company’s option and, therefore, did not result in a liability on the accompanying Consolidated Statement of Financial Position..." Historical Prices table.finance.yahoo.com Timba

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