Wayne -
[I think you know my view on this subject.
The whole issue of accounting for stock options leads you to an endless number of complications ranging from stock price movements, tax benefits, theoretical values and assumptions, fair value of the stock at the time, etc...
There are a variety of ways of looking it. All have advantages and disadvantages. The key point is that if you ignore options you are missing much of the story.]
In my view, virtually all of the complications are the result of severe misconceptions. There is absolutely no reason to be concerned with option valuation methods if, in fact, there is no option expense to the company as a whole, as I claim. Options are granted with the intent of being exercised. To the extent that this true, there is little reason to assume that every outstanding option shouldn't be counted as future stock. If options fall out of the money, they will almost universally be repriced. The main consideration is that a running count be maintained to monitor the options lost as the employee leaves the company, as well as the new ones granted.
I have to take the view that if you don't attack my proof, you haven't yet found a chink in it. -g-
Regards, Don |
