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Technology Stocks : Intel Corporation (INTC)
INTC 46.96-2.8%Jan 16 9:30 AM EST
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To: Thomas M. who wrote (97502)1/25/2000 12:50:00 PM
From: Saturn V  Read Replies (2) of 186894
 
Thomas <Intel spent roughly $3.5 billion on stock repurchases. Since the float stayed roughly the same, all this money was spent to fund employee stock options. Thus, Intel is hiding a substantial portion of its payroll expenses from the income statement. This roughly doubles Intel's earnings. >

Arent we forgetting acquisitions. Intel has been acquiring companies, and some of these were accomplished by an exchange of the acquired company stock for Intel stock.Level One was bought by such a stock swap.

So a part of the the Intel dilution and stock repurchase go towards acquisition. Secondly the stock repurchase is also used for employee stock purchase plans similar to the one used by GE and others. The company sells stock to employee's at a slight discount. Clearly both these items are not salary expense. The stock option is sold to the employee at the market price on the day the option is granted. Again the stock repurchase is not an expense.

We have gone through several iterations of what a stock option is worth. Clearly there is an opportunity cost associated with it, since the company is holding the stock ( to back up the option) instead of selling it on the market , and using the proceeds. However it is not an expense.

However I do not think that you are looking for reasoned arguments. You appear to be in a mud slinging mode. You are just looking for any mud to throw. Intel accounting is one of the most conservative you will find, despite what your august guru might preach. Intel is also one of the most profitable companies and also one of the most upright in its projections.

The future is always open to question. You are entitled to your opinion, and I am entitled to mine. Either find good sensible reasons for your assertions or keep your mouth shut.
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