Good job!
You answered correctly and then some. I was actually looking for a much simpler answer. Let me add one additional item to the riddle: the jet was purchased at 11:59pm on December 31. Therefore, there is no incremental interest or depreciation expense. Obviously, earning are the same for both companies.
The point I'm attempting to get across to Mark, is, that stock based compensation or equipment purchases for consideration of stock etc... DO NOT *GENERALLY* MATERIALLY AFFECT EARNINGS--especially when the amount of the stock issue is one-half of one percent of the shares outstanding. A company is not going to issue 117,000 share if it is going to cost $0.08 per share. Yes, Mark is right it is dilutive to INTS, WIND, and almost every other company that issues stock for compensation etc.. This is because the EPS calculation's denominator (assuming primary--I think WIND will be required to disclose fully-diluted EPS next quarter) will increase by the amount of shares issued. In INTS's case, EPS would have been $0.04 (rounded to the nearest hundredth) the same as reported.
I think Mark should take a look at WIND's recent 10K filing. Ron Ableman is a graduate of the Stanford MBA program. Richard Kraber is a Harvard MBA. These people are not stupid! They are not neophytes (LOOK IT UP MARK!). They do not plan secondary offerings, convertible security offerings, stock splits or acquisitions, without careful thought to shareholder value. I'm not an equity analyst, just a credit geek. I spend a great deal of my time analyzing management teams from $50 million to $4.0 Billion companies from a credit perspective. IMHO this management team is one best I have ever seen. Not only do they continue to flawlessly execute quarter after quarter, but they have resisted the temptation to grow too fast. Although hyper-growth can pay handsomely in the short-term, it can ruin a company just as quickly. I guess Mark must invest in companies with Management teams that are only concerned with themselves and not shareholders. Hey Mark: Do you own any Columbia HCA? How about an old company called Media Vision Technologies? I hear they have (or had) great management teams.
Darryl--Thanks for the Bob Marley reference. Sometimes I need to "Get up, Stand Up" when it come to WIND! |
