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Technology Stocks : Dell Technologies Inc.
DELL 133.62-5.1%2:07 PM EST
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To: Mick Mørmøny who wrote (169665)5/19/2002 8:30:37 AM
From: Sig  Read Replies (2) of 176387
 
Re Dell options.
As required by the SEC for some years, Dell has at the end of each yearly report, computed and stated the effect on earnings if the cost of all options were accounted for.
If some Congressmen now want to force all companies to deduct them from earnings, then its not necessarily a disaster, because the same amount of investment dollars is still available overall and will be divided among equities
on a comparative basis.
I think its very foolish to now change such complicated rules as govern the methods of income reporting but its human nature try that. Lots of people would like to change the Constitution also.
In regard to Dells buying of calls and selling puts, Dell has the option of buying stock to cover the puts as they come into the money, and thus is not "out" the difference between the strike and todays stock price which makes it very difficult to say whether there is a significant loss.
That is, the loss would not be the difference between the $45 strike and todays stock price. The overall result
will not be known until the stock price at the final options expire is known ,and anyone capable of knowing that price should be richer than sin and not needing to read this thread.
Sig
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