CTC,
>Brian, that's an interesting thought. You could just apply the Black-Sholes model at the time the option vests. <
Exactly. And, it should show up in that term's financial statement (quarter, annual, etc.) as expenses.
>It misses the boat in one respect however. Options that you and I invest in do not create new shares. When a company issues stock options it very often creates new shares, and thus dilutes existing shareholders. At least Dell is not guilty of that bit of subterfuge.<
Yes, but with most companies, the dilution is very small. BTW, Dell is equally guilty of this. The only thing they do is buy back shares to reduce the number of outstanding shares, but many others do that as well. In fact, if Dell did not hand out options, those buybacks would be a really positive thing for the shareholders - now it is not.
- Brian. |
