SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : Any info about Iomega (IOM)?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Gary Wisdom who wrote (44043)1/20/1998 12:35:00 AM
From: slipnsip  Read Replies (1) of 58324
 
I will respond to you, because you are somewhat arrogant and I believe, that there is a high probability you are incorrect. Because you make a statement with conviction does not make it correct. Because you try to demean anyone that questions your commentary does not make it correct. Yes I know, it is not correct to begin sentences with because.

<Uh-oh, here I go again. Try this:

Iomega has 100 shares outstanding at $12 each. That's a market cap of $1200. Assuming they never spent a dime and have no assets, shareholder's equity is $1200. Each share is worth exactly $12.

Now, Dr. Iomega exercises options to buy 100 shares of authorized, but not issued, shares @ $12. That's additional paid in capital of $1200. Now, there's $2400 of shareholder's equity. And 200 shares issued. Per share value is now $12, exactly what it was before.

How is that dilutive?>

I will tell you how it is dillutive. Before Dr. Iomega's options were exercised, there were only 100 shares outstanding. Thus whoever held those shares was entitled to 100% of the companies earnings. When Dr. Iomega's options were exercised and the 100 unissued shares became issued and outstanding, the original shareholders claim to earnings was cut in half. Thus you would expect to see a 50% depreciation in the stock price (Ceterus paribus).

I believe your logic while appearing to make sense on the second half of your explanation is fundamentally flawed (as is most of my spellings). But as a humble person who does not know everything I reserve the right to be wrong. I strongly believe your confusing market valuation with book value.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News