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Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs
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To: Don Lloyd who wrote (723)12/16/2004 9:56:26 PM
From: Stock FarmerRead Replies (1) of 786
 
Don,

The issue is that a company cannot own itself, no matter how many of its own shares that it may hold, or how many new ones that it may create and hold.

If the corporation issues a CLAIM on the assets of the corporation, which CLAIM is worth $X on the open market, then that CLAIM is a legitimate financial instrument, and has legitimate market value of $X.

Whether or not a corporation can claim on all of itself is irrelevant.

Furthermore, we are not talking about the corporation printing up more shares and keeping them. We are talking about the corporation printing them up and distributing them.

In which case we stumble into the "unless and until" part of your statement: In either the case, the internal shares cannot have any economic effect unless and until they are externally distributed in a manner that is NOT proportional to the external shares already in existence.

And then what? They have value, right?

QED.
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