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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Roger A. Babb who wrote (1374)1/23/1998 4:53:00 PM
From: Joe Stocks  Read Replies (2) of 18691
 
Motley Fool wrote this......
>>>Finally, many companies issue lots of stock options to their employees but have essentially been hiding the impact of these options on earnings by reporting just primary EPS. A study conducted by Bear Stearns showed that Dell Computer (Nasdaq: DELL), for example, would have reported $1.99 per share in basic earnings for the first nine months of FY97 while diluted earnings would have been 9% less at $1.81 per
share since options and other securities would have added 30 million shares to the 334 million shares outstanding. So what the new rules do is make it easier for an investor to compare the basic with diluted earnings and get at least some sense of what stock options actually cost a shareholder.
<<<<<

Does this mean that Dell may have a hard time meeting estimates this next quarter? Since DELL is at the top of their recent trading range could this be a good short candidate?

Thanks, Joe
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