"When employees exercise options, don't they have to pay something?"
Yes, they pay the strike price. According to report,
dell.com
employees paid back to Dell $161M. This makes the average
strike of about $8 (assuming my gestimate of 20M exercised
shares is correct, see my post to Ron). Must be mostly 10-yrs
old options close to expiration.
"Also, since diluted shares includes unexercised options, doesn't the ongoing calculations of earning per share really include the impact of stock options?"
The un-exercised options are just as they are, un-exercised.
They might be exercised, they might not. Therefore,
technically speaking, "the impact of stock options" is
really an unknown when repored in the bulk number.
This is not the point, the point is that the total earnings
are severely overstated, every quarter. This is the real
(but unaccounted) impact of stock options.
- Ali |
