Zeev's Turnips - No Politics Message Board

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Strategies & Market Trends : Zeev's Turnips - No Politics

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To: Jack T. Pearson who wrote (98533)	8/24/2002 10:11:50 PM
From: Timothy Liu	Read Replies (2) of 99280

Cash a company gains by selling stock does add to the value of the company. A company giving stock option to employee is like selling the stock option on the market and give the money to the employees. The problem with current way of expense option is: the company should realize a gain first (money flow in by selling stock option) and THEN it can expense it (money flow out to the employee). The company does not loss anything but its shareholder may see dilution. A simple way to look at it is this, the stockholders of a company can say we are giving you 2% of the company if you can grow the company by 10%. The option is not a cost of company but a transfer of wealth from shareholders to employees. Company and its shareholders are two different things. Tim

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