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.
Strategies & Market Trends : Gorilla and King Portfolio Candidates
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Seeker of Truth who wrote (43790)6/22/2001 1:05:36 AM
From: hueyone  Read Replies (1) of 54805
 
Hello Maclolm,

Thanks for your comments. I look forward to studying your post.

If SEBL can't reward its employees with stock options that are worth anything then neither can the other IT companies so where can these bright people go?

I am aware of the argument that the bright employees may have no place else to go having made the same argument myself on the Cisco thread.<gg> However, I do have some very limited anecdotal evidence from a few people that I know who work in the tech industry that some employees are demanding more cash and less options and are getting it. Do you think there is any possibility that a trend to more cash based compensation is beginning? You are in the tech industry and I am not; I really have no reliable clues or data.

My broader point of the example, however, was that the 50% of operating cash flows for fiscal 2000 that the tech industry got overall from stock options exercise tax benefits, may be mostly missing for fiscal 2001 and that this could create a major hit on many tech companies cash flows before the year is out.

Usually I like to compare the P/E with that of money but you indicate that E is zero

Although my last post looked at entire cash flow and subtracted stock option impact to arrive at a negative overall cash flow for the purposes of giving a rather dramatic example of the potential contribution of options exercise to overall cash flow, I generally prefer to narrow the study to adjusted free cash flow as I did in my earlier post on SEBL. Again, free cash flow is intended to be a proxy for owner earnings from operations. My adjusted free cash flow per share number was small, but positive for SEBL for both for fiscal 2000 and the first quarter. After Ardethan alerted me to my first quarter error, I found that the adjusted free cash flow number for SEBL for the first quarter did not look so bad and mentioned that I was withdrawing my suggestion that SEBL was horribly overvalued until further study---which I still haven't done. Anyway, I would rather stand behind my positive adjusted fcf numbers for a positive E for valuation purposes of SEBL than the negative overall cash flow I generated in the last post.

Now I look forward to further studying your analysis. Thanks for sharing.

Best, Huey
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