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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: At_The_Ask who wrote (219768)2/8/2003 10:07:27 AM
From: At_The_Ask  Read Replies (1) of 436258
 
forbes.com

Moreover, you can bet that analysts will ignore the options hit to earnings anyway and knock them out of the pro forma results they use to value companies. After all, in the mind of a Wall Street analyst, an expense for stock options is just another noncash charge against earnings and is of little use in valuing a company. "Every analyst I've spoken to has said they're going to pay no attention to it [the profit hit from options] at all," says Willens.


This is the problem. It's immaterial to an investor what a company is "worth". An investor cares about return on his investment which is diluted by constant issuing of more shares. The street knows this but prefers to use obtuse valuation metrics in order to keep people buying this junk.
There should be congressional inquiries into this kind of thing but the gubmint isn't going to kill the goose that lays the golden eggs. I'm not sure if the world can "handle the truth" anyway. Could be worse than 29.
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