how MSFT would have lost 7 billion in 2000, if the Ending of Double standards for Employee Stock options...
Interesting. I didn't realize it would amount to so much.
I don't know if McCain will make much headway on the options issue. But the very fact that he will be discussing it every day will cause more and more analyst to finally admit the situation.
And that bodes quite ill for the "generals" which make up the Nasdaq, MSFT being the commander in chief.
I was telling my wife last night that MSFT may have reached the peak of its "performance curve".. IOW, it is now no longer a growth stock, but one with stagnant or decreasing revenues streams, as well as the overhead of 40,000+ employees, most of whom are subsidized by stock options. I explained to her that when MSFT's stock is performing well and advancing, this is not an issue, because the stock value appreciates above what the options were issued at.
But if, or when, the stock price depreciates, in order to receive the same $$$ amount of option "premium" in the value above the market price for wage subsidization, they have to mark the strike price below the market price of the stock, probably by 25-50%. And if the stock price goes down, those options get revalued downward as they did last year for MSFT, and more dilution occurs in order just to keep present wages intact.
McCain has a strong case that can be made on the issue. It may not go anywhere, but it's going to educate a whole lost of investors about the hidden landmines that still lurk out there.
Btw, MSFT is not quite a dead duck, since they have so much cash they can use to repurchase stock against option exercized. They just will wait until the stock price falls low enough below the price they originally issued the options to the employee at, so they can capture a "gain" (we "sold" stock to the public (via employees) at $66/share, and repurchased it on the open market later on at $55).
But I think MSFT is certainly relegated to a trading range until they can find a product that has the potential of generating huge revenues for them again, so they can carry on the shell game a little longer.
And I'll leave you all with a reiteration of that quote from the register:
"'We like to think of ourselves as the Microsoft of the energy world,' Mr Lay has been quoted as boasting."
- Ken Lay
'nough said.. :0)
Hawk |
