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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology -- Ignore unavailable to you. Want to Upgrade?

To: Starlight who wrote (7097)	8/8/1999 7:00:00 PM
From: JimC1997	Read Replies (1) \| Respond to of 18366

Betty, Since the first gain after stock option exercise (the difference between the exercise price and the share price that day) is always ordinary income, it is always best to exercise when the stock is relatively low-priced, if you intend to hold for a while. If you intend to sell immediately, then obviously you would exercise and sell your entire position, not just the portion needed to pay withholding taxes. Since neither Putnam nor Falk sold more than enough to pay the taxes due, this suggests that both believe that the stock will rise in the near future or that they are holding for the long-term tax treatment before an eventual sale. One point I forgot to mention in my last post is that Putnam may have sold a bit more to cover any taxes due in connection to the upcoming exercise and sale of his warrants (discussed in the S-3). Upon reflection I take the actions of both Putnam and Falk as bullish for the stock for the reason you cite. But I will look into the issue of whether their actions, which may be limited by insider trading restrictions, may give us some clue as to whether near-term announcements are unlikely. I have a strong feeling that the next two weeks should be very positive for the stock price. Jim P.S. I started a relatively small position in PTSC recently and noticed a lot of familiar faces on that message board.