Meathead, I wanted to provide you with an exact example of the kind of thing I'm talking about. First, look at this link:
biz.yahoo.com
Notice that options for 30,000 shares were exercised and the shares sold on the same day. The exercise price was $13.34, so the company received $400,200 for the shares. The stock was sold for approximately $2,765,400. The difference, $2,345,000, is an expense borne by the shareholders.
There is nothing special about this transaction. You will see dozens like it if you take the time to go through the insider trading options in Yahoo. Some are for lesser amounts, and some are for much greater amounts. The point I'm making is that these are expenses for which the company never explicitly accounted.
GAAP rules allow for this, and this is an outrageous lapse in my opinion.
TTFN,
CTC |
