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Biotech / Medical : Biotech Valuation

CRSP 52.51

+2.7%

Nov 14 9:30 AM EST

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To: nigel bates who wrote (4212)	6/28/2001 2:08:33 PM
From: Crossy	Read Replies (1) of 52153

Nigel, this is more a tax engineering strategy than an "investment" IMHO. I have very often seen companies authorizing the buyback of shares on the market in EXACTLY THE SAME AMOUNT they are issuing options to their rank & file. If the stock rises and we assume all options convert, the company gains a nice tax benefit. Plus the added benefit from reducing capital by an equal amount. I see this as normal "CFO stragegeering" nothing more or less. The funny thing is that very often the company has ultimately exactly the same amount of shares outstanding as before. Like 10 + 1 - 1 = 10. This is a very good tax management strategy that doesn't really hurt the bottom line. The rest from the newsblip "unsurpassed portfolio & pipeline of own company" I regard as PR hogwash - that's not the real issue here. Ask any CFO he will tell you the same.. rgrds CROSSY

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