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.
Technology Stocks : Intel Corporation (INTC)
INTC 41.41+2.2%Dec 5 9:30 AM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: brushwud who wrote (144185)9/26/2001 5:23:43 PM
From: L. Adam Latham  Read Replies (1) of 186894
 
brushwud:

Re: "Yes, the Stock Purchase Plan and Stop Option plans add to the total share outstanding as the shares are sold by the employee."

I seriously doubt that many Intel employee stock options are being exercised these days! (Except by those that accept a severance package.)

I wouldn't be so sure. Employees with over 5 years of service with Intel could have considerable stock option gains, even with the stock slide (my March 1995 grant was at $5/share, and the 1996 grant was ~$7/share). Those of us bullish on Intel may be exercising and holding stock option shares at these prices because the tax hit on NQ options is much less than last year.

Also, those shares add to total shares outstanding whether the employees sell them, hold them, or give them away.

You're right. I should have said that the total number of shares assuming dilution is based primarily on the number of stock options that are granted each year. The dilution can vary year to year because some of the options can (and have) become antidilutive. But in general, the total number of shares outstanding is increasing each year because of Intel's annual stock option grants.

"This is the way of life for tech companies who use options to attract highly-qualified employees - they all have to burn cash to buy back excess stock generated by these plans."

An utterly false statement. Most tech companies create new shares for their ESPP and stock option plans. They do not go into the market and buy shares. Those plans become a source of financing further growth.

I'm not sure what you mean here. Shares for ESPP and stock option plans come out of a company's total authorized shares. Tech companies implement buy-back programs in part to counter the dilutive effects of these types of plans. If a company that relies heavily on stock options to retain talent didn't buy back shares, the dilutive effect on EPS would be a major problem as the years passed by.

Adam
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