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.
Technology Stocks : Wind River going up, up, up!
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: J. Kerner who wrote (3342)6/25/1998 12:52:00 PM
From: Pirah Naman  Read Replies (1) of 10309
 
> My impression is the calculations are not as damaging as the FAS 123 shows

Jason,

I took a look at the annual report last night. In the last fiscal year WIND employees exercised 720,000 options at an average price of $3.36, for a total of about $2.4M (cash in to the company). During that same year WIND purchased $12.4M of shares on the open market. Net cash out about $10M. The FAS 123 estimated costs of the options was about $10.5M.

Now of course WIND could elect to purchase either more or less shares, so this seeming accuracy is probably just coincidental. (And the company does have an employee stock purchase plan, which distorts these numbers somewhat.) But take a look at the statement of cash flows; the amount which goes to fund share purchases is a significant fraction of the cash flow from operations.

This is no KO or SGP with excess free cash flow (and constantly reducing share count), it is just an attempt to slow the rate of dilution (which looks to have been roughly 10% per year over the past couple of fiscal years). Given that the shares repurchased (364,000 in fiscal 98) are so much less than the net change in share count (about 2,300,000 in fiscal 98) I'm starting to wonder if simply allowing the extra dilution wouldn't be less damaging than spending so much to fight it.

Pirah
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