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Technology Stocks : Siebel Systems (SEBL) - strong buy?
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To: David Howe who wrote (5920)6/7/2002 3:49:03 PM
From: hueyone  Read Replies (1) of 6974
 
This is not a real expense and should have no bearing on the value of a company going forward.

Where do you think this money comes from? It is we shareholders paying Tom Siebel money to run the company and it is clearly an expense.

If SEBL paid for their supplies, rent, insurance, repair and all their other expenses with stock options, would you then argue that SEBL is the first billion dollar plus revenue company with zero expenses? I don't think you would. Well, there is no difference in paying employees with stock options than paying any of these other expenses with stock options. The company is giving up something of value when it hands out employee stock options, and Black Scholes, is one of several ways to calculate this value. Another way is to simply subract the strike price from the market price at time of exercise. But counting the value as zero, as is the practise now, is so far off from any representative truth, it is ridiculous.

Best, Huey
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