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Technology Stocks : Intel Corporation (INTC)

INTC 38.16

+2.5%

Nov 7 9:30 AM EST

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To: The Duke of URL© who wrote (179967)	12/20/2004 11:10:56 PM
From: rkral	Read Replies (1) of 186894

Duke of URL, re "It is in effect a gift by the outstanding shareholders of part of their ownership rights in the future income of the company to employees for working hard." But it's more than that. Existing stockholders also lose part of their ownership rights to existing stockholders' equity. For example, assume 10 shares represent ownership in $110 of equity and a company has net income of $22 during the next year ... ... with no dilution, EPS is $2.20 and equity per share increases from $11 to $13.20. ... with 1 share dilution during the year, EPS is reduced $2.00. However, equity per share only increases from $11 to $12. That 1 share dilution cost didn't just cost existing shareholders $0.20 ($2.20 - $2). It cost them $2.20 ($13.20 - $12). That sure suggests some expenses are missing somewhere. Ron

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