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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (53220)	6/6/2000 9:23:00 PM
From: Techplayer	Read Replies (2) \| Respond to of 99985

Haim, Here is an article that you will actually like. tp billparish.com

To: Haim R. Branisteanu who wrote (53220)	6/7/2000 9:57:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Haim, one thing about ESOPs: there is no cost to the company directly. it doesn't cost a company anything to switch on the copier and print up new options and shares. on the contrary, they ultimately get a tax rebate with which to inflate earnings. the cost is borne entirely by existing shareholders, whose stake in the company is diluted. it's a variation on the fiat monetary system. a pyramid scheme in essence. once the bubble truly pops, another hare-brained practice will be exposed for what it is: the buying back of wildly inflated stock on credit...balance sheets across the board have deteriorated because of this. imo the stock options plans are responsible for this, as this method of propping up a stock's price helps options to reach their strike price. eps is rising, while earnings may in total stay flat (see IBM), however, debt on the balance sheet is exploding and shareholders equity shrinking. it's wealth transfer on a grand scale. it's also economical nonsense. when stock prices are inordinately high, firms should issue stock for their capex needs, not buy it back and incur debt in the process. it's another example of the malinvestment fostered in Greenspan's crack-up boom. regards, hb