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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Petz who wrote (80070)	5/14/2002 8:11:01 PM
From: pgerassi	Respond to of 275872

Dear John: I also applaud S&P's efforts. This may start to be the end for outrageous earnings claims. I too, would like them to go back 3 to 5 years and redo all of the earnings. Many eyes may open on the results. Many formerly profitable companies will show up as losing money for shareholders. Perhaps this will also allow for more realistic year to year and quarter to quarter comparisons. Especially if this becomes the core of a new standard. Another would be required public release of their corporate tax forms and all related documents. It's interesting that so many so called "profitable" companies pay little or no taxes. I hope that both the SEC and FASB move in the direction of S&P to more closely show whether or not companies are actually making money without everyone going through the esoteric calculations required. After all, collectively we are supposed to own these companies. Pete

To: Petz who wrote (80070)	5/14/2002 10:53:26 PM
From: Robohogs	Read Replies (1) \| Respond to of 275872

The problem is in valuing those options - what are they really worth?? The current measure used in the footnotes to the financial statements of all US filers is to use the volatility and an adjusted life of the options (since they are locked up so many ways) and to calc value on this basis - in real life, most long-dated options have lower vols than short term options. In AMD's statements, they used something like an 80% vol last year. This is ridiculous and most financial institutions (read investment banks) will adjust the vol down to do valuation work given the fact that a long term vol of 80% is extremely high. But knocking the vol down say by half (to 40% - still very high BTW) reduces option value by more than half. How do we measure this? There is no way to implement this other than to ban options in general. I personally would like to see options expensed as I feel that many tech companies have not caught up to the new crash reality and are handing out more and more options with no thought about the cost, keeping total expenses up even as profits crash. Some expense measure would stop this. Any suggestions? The IRS does not even try to value the option - they give a corp. a deduction for the amount the option is in the money the day of exercise. Jon