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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Gabriel008 who wrote (153113)	2/7/2000 2:43:00 AM
From: Sr K	Respond to of 176387

Dell does not trade options in its own stock and it does not do open market trades in its own stock. The puts it sells and calls it buys are privately placed transactions designed to allow it over time to buy back shares to replaced shares issued by employee stock options. The gains from these option transactions have saved cash in the past, and as CTC has pointed out, do not contribute to reported earnings. Dell also in the past has hedged foreign currency exposure, for which it received a lot of flak when it went badly after not exactly hedging. They might use some timing in this area, and "trade" in the sense of rolling over when the think it makes sense. I think you are misreading the impact of these items on Retained Earnings, and on the ROIC calculation. Overall, I think the selling of puts and buying of calls has "increased" invested capital, so the denominator is larger than it otherwise would have been (had they still bought back the same number of shares).