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

AMZN 232.50

+0.1%

Dec 26 3:59 PM EST

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To: GST who wrote (145444)	8/14/2002 12:55:30 AM
From: Lizzie Tudor	Read Replies (2) of 164684

Liz: At the point of issue the company had three choices -- 1) Issue options to you. 2) Do not issue options to you. 3) Sell options in the open market. You are forgetting some other alternatives- 4) don't hire me and issue the salary saved as a dividend. Since you couched the entire options expensing debate around the stipulation that options are compensation, you cannot break out options and salary and treat them differently without contradicting yourself... lets go on... The value of the options they could have sold but instead gave to you is the premium. If they sold options and kept the premium it would not matter what happened at expiration -- they would keep the premium. That is income. So had they not hired me the value of the salary they would have paid me would also have been income, correct? By giving them to you and not selling them on the open market they gave you the value of the premium -- that is an expense. I have options now on companies -- if they expire worthless do you think I should ask for my money back? Will I get a call saying -- ok lets make some adjustments? So say they planned a layoff and removed 100 workers, is the money they save in this layoff "income" then, by your reasoning? say 50K/year per worker saved if layoffs happen midyear. Whoa thats a lot of income generated! This is just too wierd GST. You are trying to assign the "opportunity cost" of some option premium which is never sold to an expense lineitem on the books. Think about it in terms of salary it doesn't work. You cannot turn something into an expense because it could have been sold at this time and wasn't therefore a cost was incurred yikes

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