Bob Brinker: Market Savant & Radio Host Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Tim Bagwell who wrote (16358)	8/1/2002 5:55:16 PM
From: Kirk ©	Read Replies (4) of 42834

My problem with the way they want to expense options with the BS model is it is like saying the extra bedroom in your house is an asset that you COULD rent out so if you let your brother-in-law live there for free, then you should call it income even if he pays you nothing for it (i.e. no cash flow). Anyone that knows how to read a balance sheet should be able to figure out the options deal now, but ... oh well, this will go around and round but I agree with Pete here. What I'd like to see is a more clear way to show the cash flow of the options so people can see that in the money options dilute EPS (which is now reported) as well as lower the value of the stock in the treasury since there will be fewer treasury shares. What is really interesting is exercising options is actually a POSITIVE cash flow event for the companies as the strike price per share flows into the company while the book value of the share is reduced from the treasury. The asset value held by the company goes down but they get cash flow from the money required to buy. (not sure if I am saying this like an accountant, but I think my understanding is correct.)

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next