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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Saturn V who wrote (96388)	1/15/2000 8:37:00 PM
From: Ali Chen	Respond to of 186894

Dear Saturn V, <This line of reasoning can lead to absurd conclusions which I will show at the end.> I believe your thinking is absurd. Your example may make up a mediocre brain teaser for a Joe-investor. <In 1981, I sold Intel stock to buy my wife a diamond ring for $6000. If I had not bought the ring, I would not have sold the stock, and today that Intel stock would have been worth more than $2million. So can I tell my wife that I bought her a ring for $2million. Can she take it back to jewelry store and demand a refund for the the same Intel shares that I sold to buy the ring !> Note that Mr. Yu did not sell his optional stock five years ago, and did not reinvest those money into a precision metall market. The company held those shares for him at no cost. Actually, they held only a promise. And the face price of those virtual certificates was printed in agreement effectively as $1.84 no matter what. However, to compensate the pool for those exercised shares, Intel choose to buy those shares back on open market. Therefore the COST of this compensation, for the company, is the difference between what they received from an employee in accord with their agreement, and what was the current market cost. Actually, this cost maybe even higher, due to possible unrealized gains... It is you who promotes the "retrospective accounting". I believe you are confusing the pricing of "options" as invented by market traders to suck more money into the game, with the cost of "option to buy the company share at fixed price after certain time of maturity". BTW, your $6000 ring may have bought you much more in value than $2M today - your lovely wife (hopefully). Therefore, the "price will be extremely controversial", I agree, and may be very confusing. For some.