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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Ali Chen who wrote (74092)	10/5/1999 6:51:00 PM
From: Michael Bakunin	Read Replies (1) \| Respond to of 1572366

Sorry, wrong door. Don't get me wrong; I think the current accounting and tax standards for employee stock option plans have some glaring loopholes through which you can drive any number of trucks. However, returning cash to shareholders in the form of buybacks or dividends is not an expense, it is a financing activity. If you dislike this business decision, fine, but don't pretend it should come out of net income. According to Itel's latest 10K (http://www.sec.gov/Archives/edgar/data/50863/0001047469-99-011450.txt), Intel granted options on 48 million shares in fiscal '98, with a weighted average Black-Scholes value based on their assumptions of $17.91 per option -- an $860 million expense not booked under current standards. Over the same period, Intel realized a tax benefit of $415 million on employee option exercises, due to the oddities of current tax law, rather than a fair tax shield of 35%, or $145 million. You can fairly conclude that Intel is understating its compensation expenses to the tune of nearly a billion a year, and is being subsidized by Uncle Sam for another few hundred million. However, for all its faults, the company is still making tons of money. -mb

To: Ali Chen who wrote (74092)	10/5/1999 7:31:00 PM
From: Tony Viola	Read Replies (1) \| Respond to of 1572366

How many times it is necessary to repeat for you that Intel profits were not $2B but ten times smaller (if any at all) when you count money "fairly"? What can you possibly be talking about? What do you think the Securities And Exchange Commission is for? You remind me of the old Lil' Abner comic strip character Joe Bfsplk, the guy with the black cloud overhead and rain falling on his head all the time, even on a sunny day.