Additionally, at January 29, 1999 and February 1, 1998, the Company had outstanding put obligations covering 33 million and 218 million shares, respectively, at an average exercise price of $11 and $10, respectively. The equity instruments are exercisable only at date of expiration , with the expiration dates ranging from the first quarter of fiscal year 2000 through the fourth quarter of fiscal year 2000. The outstanding put obligations at January 29, 1999 and February 1, 1998 permitted net-share settlement at the Company's option and, therefore, did not result in a put obligation liability on the accompanying consolidated statement of financial position.
Bachman:
The ones in bold letters are the ones that made me confused:
a. Since when an equity option is a European style option? Could it be that the puts were sold in Europe, hence using their system? I only know that index options are European style while all equity options are American style.
b. Since when does a seller of a put option have the option of net-share settlement ? The only option a seller of a put has is to buy it back to close the position.
c. Considering Dell's stock prices on January 29, 1999 and February 1, 1998, I believe those options were OTM and expired worthless.
Although I have been doing options for several years, it just shows that my knowledge is but a drop of water to an ocean. Therefore, any information from you or Chuzz or Geoff will be appreciated.
Best regards,
Paul |
