Re: Stock options and dilution
Recently, a prospective Wind River investor, Joan Graffius, posted several questions to this thread. She's a woman of few words, but she's obviously a sophisticated investor and everyone here would profit from reviewing her posts. She decided to pass up Wind River and wisely bought Adobe and now has a very good profit.
Adobe buys their option shares on the open market as detailed in the earnings release, "Adobe Systems Reports Third Quarter Results and Announces New Stock Repurchase Program" at biz.yahoo.com
New Stock Repurchase Program
Adobe also announced a new stock repurchase program, with its Board of Directors authorizing the repurchase of up to 15 million shares of Adobe common stock over the next two years, with timing and size of repurchases subject to market conditions, stock prices and Adobe's cash position and requirements going forward.
This new program is in addition to the Company's current repurchase program for offsetting dilution due to employee stock and option issuances, which the company plans to continue. During the third quarter of 1997, the Company repurchased 450,000 shares of common stock, pursuant to options arranged earlier in the year and via open market purchases. At quarter end, the number of outstanding shares of common stock was 73.0 million.
Even though they have an option program, they refrained from diluting their stock this quarter and still managed to record a huge increase in profits. It would've been even larger if they had chosen to dilute the stock, as Wind River and Integrated Systems did this past quarter. |
