SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 253.73+1.6%Jan 22 3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Petz who wrote (80070)5/14/2002 10:53:26 PM
From: RobohogsRead Replies (1) of 275872
 
The problem is in valuing those options - what are they really worth?? The current measure used in the footnotes to the financial statements of all US filers is to use the volatility and an adjusted life of the options (since they are locked up so many ways) and to calc value on this basis - in real life, most long-dated options have lower vols than short term options. In AMD's statements, they used something like an 80% vol last year. This is ridiculous and most financial institutions (read investment banks) will adjust the vol down to do valuation work given the fact that a long term vol of 80% is extremely high. But knocking the vol down say by half (to 40% - still very high BTW) reduces option value by more than half. How do we measure this? There is no way to implement this other than to ban options in general. I personally would like to see options expensed as I feel that many tech companies have not caught up to the new crash reality and are handing out more and more options with no thought about the cost, keeping total expenses up even as profits crash. Some expense measure would stop this. Any suggestions?

The IRS does not even try to value the option - they give a corp. a deduction for the amount the option is in the money the day of exercise.

Jon
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News