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Technology Stocks : Dell Technologies Inc.
DELL 140.77+1.4%3:59 PM EST
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To: GVTucker who wrote (169537)5/7/2002 1:26:33 PM
From: D.J.Smyth  Read Replies (2) of 176387
 
GV "Just as the "loss" from the most recent option exercise only appears on the balance sheet and not the income statement, similarly the "profit" that Dell gleaned by buying back shares at below market prices in years gone by also didn't appear on the income statement."

it is "assumed", by another, that the "profit" from past options transactions, which is estimated at $2plus billion, was utilized as dollar fodder for employee/executive incentives packages. the profit did not show up as "investment earnings" as it was designated specifically as "incentives"

the same would be true of any proposed "loss" on put activity. it will not show up on Dell's balance sheet as the loss is relative only to the incentives which employees/executives receive. "no gain" = "no incentives" awarded. all these figures are accounted for separately. if these figures had been accounted relative to the balance sheet, as investment or net earnings, during the "fat years", Dell's net cash flow would have been higher. in the "lean years" any proposed "option loss" is only on paper - the "supposed loss" has already been accounted for relative to separate accounting. there is plenty of "liquid insurance" in the "separate account" to compensate for any supposed paper loss

any sell-off in Dell's stock relative to option activty is unwarranted. i think if you review executive incentive and option activity you'll find the figures relatively accounted for

this remains another hyped WStreet media event
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