Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 46.96

-2.8%

Jan 16 9:30 AM EST

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To: rkral who wrote (177575)	4/14/2004 6:26:07 PM
From: Lizzie Tudor	Read Replies (2) of 186894

well I don't know the details of how options are going to be expensed. But my point is that if some line item causes earnings to be lower, while cash is untouched (this is the case with options)- then that adds to the situation we are currently witnessing where for example yahoo is generating boatloads of cash and reporting "pretty good" earnings, meanwhile the stock goes up and valuation hawks moan. The problem is all these hits to earnings which are not cash expenses. Eventually the cash stockpile overcomes whatever the meager earnings picture is. The whole valuation argument as applied to historical earnings is suffering from this discrepancy. I doubt companies in the 30s and 40s were generating double the cash vs. earnings. Back then, with a cleaner tax code, earnings and cash were probably pretty close. Today, cash = earnings and earnings = something companies play with.

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