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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: nihil who wrote (69818)	10/30/1999 1:32:00 PM
From: Don Lloyd	Respond to of 132070

nihil - (You've ignored that fact that many uptrending stock companies (MSFT & INTC fi) sell out of the money puts and put most of the premiums in their pockets. Other options are exercised so that the company accumulates shares at discounts to honor the employee calls. It is not unusual for these companies to pocket $100 million or more per tear.) I didn't ignore it, but it doesn't really tie in directly to the question of accounting for option grants. There is nothing inherently wrong with selling puts. Any company has the fiduciary responsibility to prudently invest its cash flows on behalf of its shareholders, weighing both risk and reward. Virtually any legal internal or external investment could conceivably qualify. The difficulty comes from the commingling of operational and investment results. To the extent this occurs, the reported results are less trustworthy indicators of the operational health of the business. Regards, Don