SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Intel Corporation (INTC)
INTC 36.49-1.0%1:20 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: GVTucker who wrote (172070)12/2/2002 2:13:34 PM
From: pgerassi  Read Replies (3) of 186894
 
Dear GVTucker:

You fail to see the big picture. If shares repurchased yields a lower book value, why do it? The only explaination is to cover something else up. Then why is outstanding shares going down less than the amount repurchased? Yes, the difference is the options being exercised yielding new stock outstanding. And this doesn't gain as much to book value. Thus the net effect is the cost of those options (of course assuming that the cumulative shares exercised matches the cumulative shares bought which has been historically accurate for Intel) are removed from book value. And this number is the same as employee compensation that is off the P&L, but not the balance sheet.

Remember the original argument is that Intel is losing money contrary to the published reports. Counting all the reductions in equity, Intel has lost $13 billion over the last few years. This is mostly due to two things, overpaying for acquisitions and off P&L employee compensation. And of these, options are the true reason that Intel has lost $13 billion without needing to claim any loss.

Since this is allowed by GAAP does not mean it is right! Many changes are done to GAAP to make the transactions more overt (obvious to the average Joe or Jane). If changes were made to GAAP that the reported P&L number must match the per share change in Stockholder's Equity over the period, many of these dodges would be uncovered. Legitimate alterations can be easily explained.

Let's hope for that day.

Pete
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News