Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 37.57

-2.0%

3:35 PM EST

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To: hueyone who wrote (178948)	8/9/2004 8:04:37 PM
From: Don Lloyd	Read Replies (1) of 186894

Huey, Silicon Valley really has a huge scam going on by paying employees with non expensed stock options and then buying back these exercised shares with non expensed cash flow. As you know, there is unlikely to be anyone more opposed to the expensing of stock options than I am, but the buying back of stock is what makes your statement effectively correct. There are only two valid reasons for a company buying its own stock. One is as an investment the same as any other undervalued stock. The second is as a way to effectively return excess cash to shareholders, but only if the stock price is not too high. When a company CEO talks about buying back stock to offset dilution, he is effectively admitting to a capital crime. There is no valid purpose, other than deception, for buying back stock to mask the degree of share ownership dilution. The posted article understates the problem by not counting the full purchase price instead of just the amount above the exercise price. The exercise price paid has already been added to earnings. Regards, Don

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