PLASMA THERM (PTIS) Message Board

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Technology Stocks : PLASMA THERM (PTIS)

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To: John McCarthy who wrote (403)	3/21/1998 1:01:00 PM
From: JM	Read Replies (2) of 509

John: Timely article related to our discussion in IBD, Monday, March 23 edition entitled "Employee Stock Options Boost Share 'Overhang'". Jist of article is that shareholders are voting against option plans at an increasing rate since 1988. Reason is fear of dilution of earnings. Companies like MSFT and INTEL have successfully used their stock as an alternative currency, rather than pay employees in cash. A study by Pearl Meyer & Partners showed the largest 200 companies in the US have already hit the 12% dilution mark. Tech firms are at 20%. Net income must grow fast enough to offset the dilution of the per share earnings. A little bit of overhang is a must. Options are good incentive for the option holders to work hard. Companies can use options to retain talent. PTIS at 28% according to your numbers appears higher than the Tech average of 20%. However PTIS is a small cap tech. I wonder how PTIS overhang compares to other companies of similar market cap (<100M)? Seems like the question will remain: Can PTIS increase revenues fast enough to offset options dilution?

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