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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: OLDTRADER who wrote (165651)	6/1/2001 8:16:50 AM
From: GVTucker	Read Replies (3) \| Respond to of 176387

OLDTRADER, RE: new option package just announced/management-any thoughts from anyone who understands how an option strike price almost twice the market price can be valuable? Those options were awarded throughout the year last year. DELL awards options based upon 80% of the market price when the option is awarded. The only reason they're underwater is because the stock performed poorly. The options are to buy 1.25mm shares at $37 to $43. The reason they have value is because they are 10 year options. Even if DELL is highly unsuccessful and only appreciates 5% a year over the next 10 years, half of those options will have intrinsic value. If DELL provides just a normal return of, say, 10%, the price of the stock will be in excess of $63 in 10 years, and the options will be worth almost $30mm.