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

To: Don Lloyd who wrote (82707)	8/7/2000 8:21:48 AM
From: Mama Bear	Read Replies (1) \| Respond to of 132070

Doesn't your example assume that the corporation and the owners of the corporation are two separate entities? The shareholders are sure paying a price if the new shares are issued to randomly picked folks. Regards, Barb

To: Don Lloyd who wrote (82707)	8/7/2000 8:26:32 AM
From: Bilow	Read Replies (1) \| Respond to of 132070

Hi Don Lloyd; Yeah, it is "cost free to the company," but by the same argument, when the company sells shares, it provides "free money to the company." The correct way to analyze the situation is not from the point of view of the corporation, which is not a person, and does not have a viewpoint, but from the point of view of an individual shareholder, who is a person, and does have a viewpoint. [Edit: Corporations do not have viewpoints, but spokesmen, employees, officers and shareholders do.] -- Carl

To: Don Lloyd who wrote (82707)	8/7/2000 8:37:44 AM
From: Mike M2	Respond to of 132070

Don, I understand your point of view but I think we can agree that the generous use of employee stock options has enabled many companies to reduce their salary expense. In addition remember the companies take a tax benefit for the tax paid by employees on the exercise of stock options- to the extent this happens profits are overstated. One of the worst consequences of the proliferation of employee stock options is that management is motivated to ensure the stock appreciates as quickly as possible in the short term at the expense of the future. The price will be TL & EV HO HO HO Mike How are your marbles? -g-

To: Don Lloyd who wrote (82707)	8/7/2000 8:52:15 AM
From: Craig Richards	Read Replies (1) \| Respond to of 132070

Don - I'm not familiar enough with accounting to comment in depth, but from a common sense point of view - if Intel distributes their shares of Micron to randomly selected individuals, would that be "cost free to the corporation" in the same way? And if distributing shares of Micron is "cost free", what about distributing money? What about distributing products? My best guess is that distributing shares of stock is "cost free" due to commonly accepted accounting rules. Just because that's what the accounting rules say, doesn't mean that it's valid in every sense, only that it's valid for a certain type of accounting. Clearly accounting is somewhat subjective, as companies keep 2 sets of books - one for the SEC and another for the IRS. So you must modify your statement to indicate that it is cost free according to a certain set of accounting rules. Perhaps the accounting rules need to be changed?