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Technology Stocks : CYRIX / NSM

NSM 18.27

0.0%

Jul 31 5:00 PM EST

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To: Joe NYC who wrote (28426)	7/21/1998 3:16:00 PM
From: Dale J.	Read Replies (1) of 33344

Joe, I am not sure if anoyone seriously believes this alchemy. The bottom line is: it is a zero sum game. No magic. The investor either ends up with diluted shares, or the money disappears from the balance sheet. I agree. I think it's a shell game designed to confuse investors. You really have to keep your eye on the ball when it comes to Wall Street magic. I don't have a problem with rewarding performance (employees or management), but I take issue with the expenses bypassing the P & L statement. A forbes article was sent to me on the AMD thread courtesy of Langlois Michel. forbes.com Below is an excerpt explaining FASB's contention that the options cost should be run through the P & L. But the "shysters" lobbied against it: "FASB felt it was a cost." The board tried to come up with a standard that would require companies to run option costs through their P&L. But the effort became political roadkill after the BigSix accounting firms and much of corporate America lobbied heavily against it. "The argument was: reduced earnings would translate to reduced stock prices," recalls Beresford of the brutal battle that finally buried the idea in 1995. "People said to me, 'If we have to record a reduction in income by 40%, our stock will go down by 40%, our options will be worthless, we won't be able to keep employees. It would destroy all American business and Western civilization,' " he says. The bull market was more important than accurate financial reporting. We had a similar discussion on the AMD board. Message 5239922 Dale

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