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Technology Stocks : Dell Technologies Inc.

DELL 115.43

-1.5%

Jan 23 9:30 AM EST

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To: K. M. Strickler who wrote (52442)	7/20/1998 1:49:00 AM
From: rudedog	Read Replies (1) of 176388

Ken - from the company's perspective, it is as if they sold the stock at the strike price instead of at market. Would you sell Dell today for $7 a share? Would you think that anyone who did that was smart? That's exactly what happens to the company when an employee exercises an option with a $7 strike price. Financially, the deal is just like Dell selling the stock to the employee for $7, then the employee selling it at market. With convertible options, that's exactly what DOES happen. You can argue that the stock does not 'cost' the company anything (we did about a hundred posts on this back in February, I think). But if you push this to the extreme (say a company that issues more stock in options than its current shares outstanding) you can see what this practice does to the shareholder value.

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