Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 205.22

-0.4%

12:34 PM EST

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To: whortso who wrote (66247)	12/25/2001 11:59:18 AM
From: pgerassi	Read Replies (1) of 275872

Dear Whortso: The claim was always that I was incorrect but, they failed to comprehend that a $0.80 a share loss in net worth matches fairly accurately with the fact that to hold shares outstanding to below the limits set by the shareholders, they have to purchase $1+ billion of them each quarter to offset the option grants. If you remove the net worth losses due to dividend payouts and other such activities that return value to shareholders, the net decline matches quite well to this interpretation. The SEC, quite rightly, believes that this leads to the large speculation bubbles such as we experienced quite recently in stock prices. The disclosure of what this means to the investors of a company make it easier to determine the value of the company. The current rules make it difficult to find the true operating profits and net profits of the company. Your dismissal shows how hard it is to convince someone that a company that shows a profit of a half a billion dollars a quarter, not considering this form of compensation, could actually be losing more than half a billion dollars a quarter. If the salaries all had to be in direct compensation (like room and board is now (the older form of this)), would the company employees consider these options as that valuable (they have been screwed with the underlying pitfalls of this) not to mention current and future shareholders. If having been burned by this, would you consider it a fraud (as many do after suffering this (just ask those Enron employees))? The SEC acts to prevent fraud (if that isn't their job, why the heavy penalties for lying on prospectuses and earnings reports then?) and they err on the side of disclosure, which I agree with. Pete

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