How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 483.88

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3:59 PM EST

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To: Charles Tutt who wrote (71367)	7/19/2002 2:10:00 PM
From: Nick Kline	Read Replies (1) of 74651

>> A bunch of bananas has value today even though it won't in two years. Similarly, options are perishable. They have value when granted, although they might not later on. Except that it costs you something to grow those bananas, to take them to market, to sell them. Options cost zero when they are introduced, they are just a possible future expense. I don't know much about accounting, but I guess you try to take reserves to cover likely future expenses, like lawsuits, recalls, product returns. Since you never know the real future cost of options, and there are various problems with ways to estimate their value, why not use a conservative estimation technique and have a smaller reserve, and them some part charged later? There doesn't seem to be a perfect way to do it. -nick speaking for myself

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