Dell Technologies Inc. Message Board

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Technology Stocks : Dell Technologies Inc.

DELL 123.42

+0.6%

10:16 AM EST

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To: edamo who wrote (114235)	4/6/1999 11:54:00 AM
From: Chuzzlewit	Read Replies (2) of 176387

Re: Dell puts But what happens to Dell if its stock doesn't continue to go up and up? The liabilities could be huge—say $3.1 billion in the other direction. A poorly though out, and misleading question. If the stock were put to Dell the negative (remember, this doesn't hit the income statement) would be the striking price plus the premium received less the market price of the stock (ignoring interest earned on the premium). But this ignores a more fundamental issue. When a company purchases its stock (as opposed to an individual) it goes into treasury and is not part of the number of shares counted as issued. And stock buybacks do two things: first they are really tax-advantaged, disguised dividends, and second, by reducing supply they tend to increase the share price, at least over the short run. TTFN, CTC

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