Broadcom (BRCM) Message Board

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Technology Stocks : Broadcom (BRCM)

BRCM 54.67

0.0%

Feb 9 4:00 PM EST

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To: Stoctrash who wrote (5726)	3/13/2001 4:09:33 PM
From: Bernard Levy	Read Replies (1) of 6531

Hi Fred: There are now 2 accounting issues involving BRCM. a) The warrants which were accounted for acquisition costs. The last 3 Qs will need to be restated with acquisition costs decreased, but revenues decreased by the cost of the warrants prorated in function of how many become earned for certain purchase levels. b) As I pointed out last night, now BRCM has been caught giving stock options to some employees at an exercise price way below the price level of BRCM stock (the trick is that the employees were given options in companies soon to be acquired by BRCM). This may trigger an IRS audit. Companies get to deduct the cost of options from their profits, but this assumes options are issued at the market price. I have no idea whether below market price options are allowed by the tax code (you certainly will not find INTC or TXN engaging in this kind of practice). If not, the IRS may soon come knocking at BRCM's door. This should keep BRCM's accountants and lawyers busy for a while. Regards, Bernard Levy

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