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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (41113)	4/4/2000 2:34:00 PM
From: Valley Girl	Read Replies (1) \| Respond to of 74651

Yes, others already pointed out my error re. the strike price, and I stand corrected. Re. the wage versus expense issue, my main problem with the critics are that they're making the classic error of double-counting. The treatment as an expense for tax purposes makes sense and benefits the company. From a market perspective, I don't think there's any other treatment that makes sense than to simply account for the dilution. If you count the options as an expense, thus reducing EPS, and then also divide that figure by the larger number of shares, you've counted the expense twice. If a company wants to pay employees entirely in stock, I don't really see a problem there. Tom Siebel effectively did this early in the company's life (pre-public); to save cash he allowed employees to take shares of stock in lieu of pay, worked out great for both Tom and his shareholders in the long run.

To: Hawkmoon who wrote (41113)	4/5/2000 2:01:00 AM
From: rudedog	Read Replies (2) \| Respond to of 74651

Ron - I agree with the substance of your discussion - the use of NQ options as a substitute for pay creates a different set of dynamics than apply to old line companies who don't use options to any large degree. My problem with Parish is not the focus on options as a wild card in the accounting picture, but his focus on MSFT when this is such an endemic issue in high tech, and MSFT far from the worst abuser. I worked with one company who wanted to pay my consulting fees in stock options... tricks like that may be OK for a privately held company, but are clearly not in shareholder interest even there. None the less, those are the rules at the moment, and only a widespread or even mandated shift in the way options are accounted for would address the problem. There is also no good way to account for the unvested options that I have seen - only a portion will ever be exercised, and the exercise date and value are unpredictable.