SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Ask Michael Burke
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: umbro who wrote (64889)7/20/1999 11:39:00 AM
From: Knighty Tin  Read Replies (1) of 132070
 
Umbro, You have hit on several factors in the stock options scam MSFT and many other cos. have perfected to protect phony reported eps. Here are some of the factors:

1. The options are handed out in lieu of pay. With pay, you have to run it through the expense account. With options, it is make believe on the balance sheet nobody looks at and saves the co. on its expense column.

2. The cos. often borrow to buy back the shares. Since mgt. receives the lion's share of options, it is really the shareholders' assets being raped, with debt, to line the mgt's pockets. And the shareholders love it. As long as the stocks go up.

3. If there is a capital gain and the employees exercise their options, the co. takes a tax write off of the difference between strike price and exercise price. Without an offsetting expense. So, lower taxes also add steroids to reported net earnings.

4. Yes, it is odd that they are issuing debt and shares to buy stock on options they've issued. This is one reason cos. have striven so diligently to convince the ignorati that book value does not matter. Only reported eps matter. They cannot fake book value as easily. <g>

5. The companies buy high and sell low and shareholders tell mgt. they are brilliant and give them mroe stock options for this flim flam.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News