Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (9052)	8/5/1999 6:42:00 PM
From: Haim R. Branisteanu	Read Replies (2) \| Respond to of 21876

CTC if you can not read the whole financial reports to bad for you. I am not blowing any smoke and it is a fact that CA, for the last year, never recovered to $62 if not for CA smoke and mirrors financial reporting CA price should be above $100 today, instead it is some were around $45. Ho Ho Ho only 55% relative drop Have a nice day Haim

To: Chuzzlewit who wrote (9052)	8/6/1999 2:15:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 21876

In a PM to me a poster made some points that I think are important. Her specific comments are in italics. Here is my answer to her: In my opinion what is illusory with the LU balance sheet is the cost of stock options. You are preaching to the choir on this issue! Companies seem to want to hide the true cost of salaries and percs, and are using share owners to defray these costs. And we are not just talking about high-flying technology companies. It is common for traditional smoke stack companies and manufacturers to use this dodge. Net stock option exercise appears in the in the statement of owners equity, but does not appear on the income statement. But similarly, "earnings" from the sale of put options does not appear on the income statement, nor do the results of trading in the company's securities appear, and in this sense I agree that earnings are grossly misstated. Unfortunately, there is no resolution in sight for this problem, although the SEC has been trying to force reforms. The question is what is the value (or cost to shareholders) of these instruments. I have advocated using the B/S model to attach a cost to the issuance of these options. But depending on how the value of options grants are calculated, accounting earnings can vary widely.