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

To: Freedom Fighter who wrote (76456)	2/23/2000 6:07:00 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 132070

Wayne - [[Parrish's mistake is his assumption that MSFT must buy back the shares as they are exercised. MSFT need only issue more shares and dilute the company. Obviously whether they go through tons of cash repurchasing the options or issue 800 million new shares over time it is a net negative for the current common shareholders, but the options are not a debt equivalent in my book. Almost the entire technology sector is running a taxpayer subsidized pyramid scheme right now. They issue options as compensation that don't get expensed. They then use the extra cash to make investments in other technology companies issuing options and making investments. When the options get exercised they get a tax benefit on the difference between the exercise price and the stock price. This is known as "full cost accounting" and gives them the maximum possible tax break on something they never expensed. The tax break gives them extra cash to invest. They then sell investments in companies using the similar model in order to make their earnings numbers. None of the stock prices are based on the true operating performances of the underlying companies. There's a lot of great technology companies out there, but they are simultaneously getting away with running a huge scam on investors and taxpayers because the economic reality is not being captured and in some cased purposely ignored (Wall St.) It truly is a wealth transfer mechanism. If everything was marked to operating reality the Nasdaq would fall 75%. ]] If I were you, I would start worrying. I can find nothing in your entire post to nitpick, and I can enthusiastically support it completely. -g- Regards, Don