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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Mike Buckley who wrote (52978)	11/8/2002 7:42:23 PM
From: Stock Farmer	Read Replies (1) of 54805

I'd also like to know why stock options are anti-dilutive in years when there is a loss in GAAP earnings. Because any increase in stock price DECREASES the loss per share, which is considered anti-dilutive. Solely from the perspective of computing EPS. Example: Company with 100 shares has a loss of ($100) or ($1.00) per share. 10 stock options outstanding (price irrelevant). If these 10 options were exercised, the loss would be ($100)/110 = ($0.91) per share. Since this is a LOWER loss per share, it represents a HIGHER income and is considered anti-dilutive. The word "dilutive" has several colloquial meanings. Sort of like the word Pants. Which means a different thing in English than it does in English. John

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