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Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs
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To: rkral who wrote (16)6/12/2002 11:59:57 PM
From: Stock FarmerRead Replies (1) of 786
 
Good diagram Ron.

4) the net for mr market is what it is.

... which is?

Here's a hint. Before the exercise, Mr Market owns all of the shares of the company. A pile of things worth $X. And presumably some cash.

He ends up with all of the shares of the company. Still a pile of things worth $X (assuming share printing costs of zero) plus $10 cash (and a $20 tax credit). And Mr Market also has $70 less in cash.

Maybe you can do the math for yourself at this point and figure out what it is that it is that Mr. Market owns pre-tax and post tax. And maybe relate the pre-tax numbers to what it is that the employee gets pre-tax. And see if there's some sort of coincidental relationship.

And then we can have a rational discussion.

John
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