Bob Brinker: Market Savant & Radio Host Message Board

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

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To: Simba who wrote (16441)	8/9/2002 4:14:21 AM
From: Don Lloyd	Read Replies (2) of 42834

Simba, Well what about a long-term buy and holder of the stock ? When should the IRS compensate him since he has never lost real cash ? Why should the company get the tax benefit for this shareholder's equivalent imaginary loss in the same quarter as when the optionee exercises. This has the same problem that CEOs complain about how they can report an expense since they don't know if the optionee exercises if at all and even if they don't know when he will do it. There's nothing imaginary about a loss due to dilution. It is real and immediate. The arguments may be clearer for stock grants, but those are already incorrectly expensed. The argument your CEOs are making is irrelevant, as there is never a cash cost to the company. Regards, Don

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