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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 232.37

-0.9%

Dec 3 3:59 PM EST

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To: Oeconomicus who wrote (144520)	8/1/2002 2:44:04 PM
From: GST	Read Replies (1) of 164684

"it's value becomes simply the present value of the expected future intrinsic value, where that expected future IV is the mean of a range of possible future IVs and the discount rate used is adjusted for the risk reflected in the dispersion of that range of outcomes" Nope -- as in my house example, it is purely a matter of a volatility premium and a time premium. If the housing market is swinging wildly then the option is worth more. If the time to expiration is longer, it is worth more. And vesting is another red herring. They have value when granted. If companies decide not to use options as compensation because they are ineffective when properly reported -- so be it. But to perpetuate fraudulent reporting of earnings by not including options as compensation cannot be justifed for its presumed exoedience to the managers of the companies involved in this fraud. All the mumbo jumbo and smokescreens in the world don't change the facts -- options are compensation and compensation MUST be expensed to accurately reflect earnings.

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