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

To: DellFan who wrote (138087)	7/30/1999
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

DellFan, first, everything in a financial statement is estimated. This is not an issue of "marking to market". There certainly is a cost associated with options, and the B/S model is probably the only decent method we have for determining that cost. There is no problem in marking to market bonds -- why should options be any different? But even so, B/S has its limitations -- in this case because companies have a nasty habit of "repricing" their options should the stock fall. Dell did this following the October 1997 slide. My understanding is that only when companies reprice their options are they required to explicitly disclose the cost And I disagree with your assessment that the cost is not hidden. Until it appears explicitly on an income statement (along with profits and losses from trading derivatives in the company's own stock) I think it is fair to say that investors have no idea of the cost. In fact a few years ago there was an accounting group that attempted to figure out the true costs of these activities and they ended up SWAGing the results -- it is that difficult to figure out. TTFN, CTC