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Technology Stocks : Dell Technologies Inc.

DELL 138.94

0.0%

Dec 5 9:30 AM EST

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To: GVTucker who wrote (137097)	7/20/1999 11:55:00 AM
From: jim kelley	Read Replies (1) of 176387

European options are preferable for a stock buyback program because the buyback can be scheduled. American options can be exercised at anytime which may prove inconvenient for DELL. By using European style options DELL is simply scheduling the buyback of its shares. This buyback occurs when the options expire. The options are by that time deep in the money and the stock will be delivered to DELL at the exercise price at expiration time. DELL gets the premium up front and can draw interest on it. The premium plus interest offsets the exercise price and reduces the cost of the shares bought back.

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