Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 48.72

+3.0%

3:59 PM EST

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To: Tenchusatsu who wrote (183102)	1/17/2006 6:47:51 PM
From: Ali Chen	Read Replies (2) of 186894

"If options really cost something to hand out, then AMD is the one who can't afford to give them away, not Intel." I am afraid you are sadly mistaken here. This is a forum for investors, therefore we are talking about stock price and perceptions that drives it. Intel works hard to maintain it's image as a money-making machine, therefore it is critically important to them to show off "profits". If the profits are adjusted for actual labor expenses (in the form of stock options that are measured in amount of stock buybacks), the "profits" will vaporize, so will the stock price. AMD, in contrast, is viewed as a capable contender, with big growth potential, and it's valuation does not depend that much on the reported profits. Now, which perception will be tarnished most if cost of options will be explicitly reported to a casual investor Joe Shmoo? "Why should a company with a long history of non-profitability ever hand out options?" For the same reason as why startups with no profits and even with no revenue are handing out options - to boost employee performance without incurring too much of reportable labor expenses.

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