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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Linder who wrote (8874)	10/16/2000 11:25:35 AM
From: Mark Madden	Read Replies (1) \| Respond to of 9256

Does this mean Silver Lake will be paying 2.05 billion instead of 2.0 billion? This could bring an extra 20 cents per share to the stockholders. Big deal. Regards, Mark

To: Kevin Linder who wrote (8874)	10/16/2000 12:17:33 PM
From: Yogi - Paul	Respond to of 9256

Kevin, Also of interest: <<Meanwhile, there is the tax benefit that many companies have enjoyed in recent quarters from stock-option exercises. The benefit has been immense, says Robert Willens, a tax expert and managing director at Lehman Brothers. The deduction works this way: When employees exercise options, the gain that they report on their taxes becomes a tax deduction for their employers, since it is considered a compensation expense for tax purposes. As has been noted, neither Microsoft nor Cisco Systems paid any meaningful federal taxes last year, principally because of this tax deduction. Seagate Technology, for one, is turning this tax deduction into a bonanza, according to Mr. Willens. The acquisition of Seagate, a disk-driver maker, by Veritas Software is triggering the exercise of all of Seagate's options, he says. Through this tax deduction, "they're not only wiping out their taxable income for the year, but creating a loss and obtaining a refund of taxes paid in prior years." This huge tax benefit to companies will be much less valuable if stock prices continue to be depressed, Mr. Willens notes. (Remember that the impact will be reduced cash flow, not reduced earnings.) On the other hand, from a national perspective, higher taxes paid by these companies should go a long way toward offsetting the decline in tax revenue from fewer individuals paying taxes on their own options gains, he adds.>> WSJ Heard on Street : update2.wsj.com Paul