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Technology Stocks : Oracle Corporation (ORCL)

ORCL 220.61

+0.3%

3:59 PM EST

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To: brushwud who wrote (17767)	1/7/2003 7:57:28 PM
From: hueyone	Read Replies (2) of 19079

You certainly disregarded money already returned to shareholders in the form of stock repurchases Good point Brushwud. Perhaps share repurchases reduces both cash and paid in capital by a like amount?---in which case the underlying premise of my post would be unchanged. I will see if I can verify the accounting treatment on the company side for both share repurchases and dividends. By the way, I regard the share repurchases by companies with big stock option programs as all part of the scheme to keep real employee expense off the income statements. Nice story about that located here: bluechipinvestorfund.com Snip:For instance, it was mere child’s play for the executives to realize that if in 1982 Quant Tech had substituted employee stock option exercise profits for all its incentive bonus expense of $400 million, while using bonus money saved, plus option prices paid, to buy back all shares issued in option exercises and keeping all else the same, the result would have been to drive Quant Tech 1982 reported earnings up by 400% to $500 million from $100 million while shares outstanding remained exactly the same! And so it seemed that the obviously correct ploy for the officers was to start substituting employee stock option exercise profits for incentive bonuses Regards, Huey

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