Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 136.33

-8.4%

Feb 5 3:59 PM EST

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To: limtex who wrote (113586)	2/18/2002 10:18:55 AM
From: T L Comiskey	Read Replies (1) of 152472

L...On options and their true Fall OUT Comments appreciated...... borrowed from Zeev's T To:PETE from STAMFORD, CT who wrote (30655) From: martin knight Sunday, Feb 17, 2002 11:17 PM Respond to of 30725 The reason I think that the true cost of options is hard to calculate is that dilution is thought of as a one time event rather than the ongoing process that a substitute for compensation must be. For example a company that dilutes its stock by 2% a year will with compounding have 80% more shares after 30 years. In other words a slice of the company now will only be 55% as large at that time. Or consider the extreme example of a company that pays all of its expenses with options so that all its revenue goes to the bottom line even if its only the interest on its cash balance. Is this really a profitable company in any meaningful way? It?s this ability to mask the true cost to shareholders that makes them so attractive to management - truly a free lunch.

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