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

To: Don Lloyd who wrote (82960)	8/14/2000 11:10:42 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 132070

don, i believe you are technically correct, but practically incorrect. let's pay our electric bill with stock dilution. should the electric bill be considered an operating expense even though, as you point out, the company paid said bill with a NOT expense? what about machinery expenses? what about all expenses? if not, why not? if yes, why are employee expenses treated differently than elctricity, machinery, etc... expenses?

To: Don Lloyd who wrote (82960)	8/15/2000 2:34:01 AM
From: Michael Bakunin	Read Replies (3) \| Respond to of 132070

Don -- You know I disagree with you, so I have been staying out. To encapsulate my point, however: all costs are opportunity costs. Options have value in a liquid market; the cost of gifting them approximates the value of similar options in such a market. The opportunity that the company forgoes is selling the same options into the market and paying its employees in cash. Cheers, -mb

To: Don Lloyd who wrote (82960)	8/15/2000 8:46:31 AM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Don, I think you know my view on this subject. The whole issue of accounting for stock options leads you to an endless number of complications ranging from stock price movements, tax benefits, theoretical values and assumptions, fair value of the stock at the time, etc... There are a variety of ways of looking it. All have advantages and disadvantages. The key point is that if you ignore options you are missing much of the story. Wayne