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Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs
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To: rkral who wrote (137)7/28/2002 4:29:08 PM
From: RetiredNowRead Replies (2) of 786
 
In answer to your post to me on the Cisco thread:

So then the question becomes, not what FAS 123 says, but what are the true costs. I'd argue that FY02 would have little to no costs from options since most options are underwater. The way I'd try to value a company is if I was going to shell out cash to by the whole company myself. If that was the case, I'd determine the value as if the options grants were going to expire worthless, which is the most likely scenario for a good chunk of them. Then I'd of course say they were all very valuable, so I could get justify expensing them to knock down what my estimates of the company were, so I could get a better price on the company. Standard negotiating procedure. But at the end of the day, I'd know I was getting a good deal, because those FAS 123 costs are phantom, when most of the options are expiring worthless.
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