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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: Joe Antol who wrote (21418)3/26/1998 12:03:00 PM
From: dwight vickers  Read Replies (2) of 42771
 
Joe,

Heard some conversation on CNBC this morning regarding MSFT's statements that they are no longer going into the open market to purchase shares for the options that are being exercised by employees.

This in effect is putting them into the position of building a large short position in their own stock.

Interesting concept. They are apparently saying they feel they will be able to buy the shares later at lower levels.

If it works they will be saving lots of money. I read a while back that something like 3/4 of their profits in 1997 were used to pay for exercised shares.

Makes the business look not quite as profitable as the earnings statement would have one believe.

Using most of your profits to dilute your shareholders.

None of this, of course, means that the shares have to go down immediately, but I believe it will be another one of those things we look back and shake our heads about someday.

Dwight
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