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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Bill Fischofer who wrote (13251)	9/27/2001 3:23:40 AM
From: Gus	Read Replies (1) \| Respond to of 17183

WSJ may need a new mole at EMC. The Journal article is incorrect and has no basis in reality,” said a spokesperson for EMC.... ”......We are always looking at ways to improve our storage business,” said a spokesperson for Dell. byteandswitch.com Dell may also need to find another way out of the put-writing mess it has on its hands. .....Under the strategy, Dell sold puts, or contracts to buy its shares at specified prices, receiving about 75 cents for each put. Over the years, Dell used the proceeds to offset the cost to issue shares. Until last fall, those puts expired, worthless, as Dell's stock price was above the price set to exercise the puts. Now, the slumping market for PC stocks is producing big losses on the repurchases at a time when Dell's vaunted cash generation has been squeezed by the PC slump and its own pursuit of a price war. For the past three quarters, the average closing price for the company's stock has been as much as $22 a share below the put exercise price. For the fiscal first quarter ended May 4, Dell spent $751 million on stock repurchases, or 91% of its cash flow from operations. linuxworld.com From the 8/3/2001 10Q: ...The Company has a share repurchase program that it uses primarily to manage the dilution resulting from shares issued under the Company’s employee stock plans. As of the end of the first quarter of fiscal 2002, the Company had cumulatively repurchased 905 million shares out of its authorized one billion share repurchase program, for an aggregate cost of $8.3 billion. During the second quarter of fiscal 2002, the Company repurchased 17 million shares of common stock for an aggregate cost of $739 million. The Company utilizes equity instrument contracts to facilitate its repurchase of common stock. At August 3, 2001, the Company held equity options and forwards that allow for the purchase of 56 million shares of common stock at an average price of $51 per share. At August 3, 2001, the Company also had outstanding put obligations covering 81 million shares with an average exercise price of $44 per share. The equity instruments are exercisable only at the date of expiration and expire at various dates through the first quarter of fiscal 2004. The outstanding put obligations and forwards at August 3, 2001 permitted net share settlement at the Company’s option and, therefore, did not result in a put obligation liability on the accompanying Condensed Consolidated Statement of Financial Position. Ouch!