Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 36.38

-1.3%

3:59 PM EST

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To: pgerassi who wrote (172074)	12/2/2002 3:55:00 PM
From: fingolfen	Read Replies (1) of 186894

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. I'm sorry, but comments like "failing to see the big picture" and "remember the original argument" do nothing to support your case. You're sounding more and more like an apologist with an axe to grind than someone with a legitimate point. The proper scientific method is: hypothesis - test - collect data - analyze data - accept or reject hypothesis. NOT: form conclusion that fits your world view - hunt for / manufacture data to support it - restate conclusion - ignore problems with data - restate conclusion - ignore further problems with data - restate conclusion with grandiose patriotic tie in.

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