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

To: DukeCrow who wrote (58034)	8/10/2000 12:20:19 PM
From: Benkea	Respond to of 99985

Ali: "So would it be better to include the labor stock option expense on the income statement directly, or just by counting all employee stock options granted in the fully diluted share count?" Personally, I use all options outstanding in my share count. Buffett recommended expensing 1/3rd of options strike in year granted at this years annual. Of course though, when you have a company as grotesquely overvalued as Cisco, it's an asset if you can get employees to accept toilet paper in lieu of cash :-) The strike on options being granted presently at Cisco is probably at least 2X to 3X intrinsic value of the company. So, there really isn't a whole lot of dilution these days. In fact, you might even say they are accretive :-)