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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: DellFan who wrote (138086)	7/30/1999 4:22:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

I think I will make Chuzzlewit's points. 1. Employee stock options should be ended. That's what Warren Buffett does whenever he buys a company; 2. Barring an end to the options, they should at least be explicitly accounted for on the income statement. He has the information - courtesy of Dell who provided it in their 10K and annual report. The information is required to be disclosed by the SEC -- there is no courtesy involved. Besides which, I am an owner of the company, and the purpose of the 10-K and the 10-Q is to keep owners fully informed. Now what is the bottom line? Should Dell record a 500 million expense every year (with no tax benefit, by the way)? And should they be the only company to do that? Yes, they should be required (along with every other company engaging in this practice) to disclose the costs fully. And there is a tax benefit in the form of a credit that Dell and other companies enjoy for issuing employee stock options. Is it fair to Dell or its shareholders to record 500 million expense based on a guessed-at at fair value of the options when the fair value depends on future events which may or may not occur? Of course it's fair. That's like saying that you don't want to go to the doctor because you are afraid that there is something wrong. And that fair value accounting, in general, is a bad proposition. Accounting is not, and never was designed to be, a completely comprehensive measurement tool. It is best used to measure historical results at cost. I agree. But I propose that the B-S cost be recognized at the time of the grant and not be marked to market every quarter. TTFN, CTC