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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year
PSFT 0.00010000.0%Oct 29 5:00 PM EST

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To: RetiredNow who wrote (3671)11/22/1998 12:40:00 PM
From: Richard Tsang  Read Replies (1) of 4509
 
Mindmeld,

Repricing will have some negative effect on EPS on diluted basis going forward. The way dilution is calculated for EPS reporting is to kick in the "in-the-money" options into the divisor. The formula calculates the aggregate intrinsic value of all outstanding options. You will notice the difference in diluted shares between periods. That means those options that were not dilutive will become dilutive after repricing when the market price goes higher than the new option price and will cause the diluted EPS to go down. I think management is aware of this problem which, in their mind, is very small as compared to the need for attracting and retaining talents.

RT
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