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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 215.04-3.8%12:03 PM EST

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To: whortso who wrote (66327)12/26/2001 10:43:05 PM
From: Joe NYCRead Replies (1) of 275872
 
whortso,

Can you document otherwise?

LOL.

I think the ball is in your court, since you are the one with the off the wall theory (contrary to common sense and general understanding).

Let me give you some hints of possible footprints you can look for in your search:

Basically, under your hypothesis, when Intel issues the call option to an employee, the expenses are all taken upfront. To hedge a naked call option, what you need I guess is:
-Borrow money to buy the stock for the length of the contract
-Buy the stock
-Buy a put option to protect yourself from the newly acquired stock from tanking on you

If your hypothesis is correct, all these would have to show in the financial statements, since we are not talking peanuts. If the transactions on this scale were happening, SEC and FASB would make Intel report them. You need to find:
- the portion of the treasury stock that has been set aside for these options, and how it is accounted for
- a liability that Intel took on by borrowing the money (internally or externally)
- expense for the hedge

Joe
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