Amazon.com, Inc. (AMZN) Message Board

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

AMZN 229.94

-0.8%

2:14 PM EST

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To: Wizard who wrote (144811)	8/10/2002 2:42:14 AM
From: GST	Read Replies (2) of 164684

"Everybody distinguishes between basic and fully-diluted shares on their income statements already... it is only the method that is under debate" -- When options are expensed, the value of "the premium" is what will get expensed. Reporting diluted earnings says nothing of this premium or how it should be booked -- now it simply is not booked at all. If the premium is expensed, the reported profits of tech companies will be cut. Estimates of a cut of 30% for the top 100 tech stocks have been kicked around. We will have to wait and see. This is IN ADDITION to the dilution effect. Everything else being equal, when reality accounting comes to town, tech company p/e ratios will skyrocket and many companies will show losses where they used to show a profit.

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