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To: Stock Farmer who wrote (119060)	5/21/2002 3:54:45 AM
From: Peter J Hudson	Read Replies (1) \| Respond to of 152472

John, The cost to existing shareholders of employee options is dilution. The actual $ cost to shareholders is the reduction in market price per share caused by this dilution. Regardless how much the employee option holder realizes at exercise, there is no cost to the shareholder unless there is a decrease in market price. The market should reduce the share price by a percentage equal to the dilution. Do you agree that the only way to measure actual cost to shareholders is effect on share price?

To: Stock Farmer who wrote (119060)	5/21/2002 12:26:59 PM
From: rkral	Respond to of 152472

Anyway, we end up in a place remarkably similar to the proposition advanced by S&P!!! AFAIK, S&P has not said HOW they are going to include the cost of options .. or even said WHAT they are going to include. So how can you compare? Ron

To: Stock Farmer who wrote (119060)	5/21/2002 3:32:22 PM
From: Clarksterh	Read Replies (2) \| Respond to of 152472

And so it will pretty well render such ratios as PE and PEG somewhat meaningless. Really one would need to compute P = (PE - PD) because Earnings will follow one curve while Dilution Cost will follow another one. Thanks you for agreeing with exactly one of my points. It obscures earnings to try to combine two very very different kinds of beasts. The whole point of earnings is to be simple. Cash flow, ... may have to be complicated but ... . C CClark Clark

To: Stock Farmer who wrote (119060)	5/21/2002 5:06:01 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 152472

Stock option chicanery: Message 17497422 Message 17496250 From "The Great Financial Collapse of 2001" stream, renamed because there wasn't any great financial collapse of 2001. But the second coming is promised for this year. Or maybe next. It seems that because there are no longer vast capital gains to fuel Wealth Effect and Sudden Wealth Syndrome profits for psychologists, people are drag netting the corporate world to see where the money is going, or more accurately, has gone. They have found stock options as a major drain on shareholders' assets. They are not happy. Debt and stock options not to mention Enron-style accounting shenanigans are going to be persona non-grata when investors look at potential investments. Thanks for your excellent posts on the matter John. Mqurice