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Technology Stocks : Siebel Systems (SEBL) - strong buy? -- Ignore unavailable to you. Want to Upgrade?

To: rkral who wrote (5989)	6/10/2002 11:42:48 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 6974

We don't know very much, but one thing we know for sure is that companies are misrepresenting profitability to someone. Who do you think it is? Shareholders or the IRS? "Misrepresenting profitability" relative to what reference? Relative to something called revenue minus cost!!!! Now, as to IMHO profitability is currently misrepresented to both the IRS and the shareholders. First to the IRS, because the so called "employee compensation expense" is a phantom expense. I think you have it slightly backwards. The cost that the company reports to the IRS is very real. That cash that goes into the pockets of employees came some where. That person (or set of persons) paid a price. Very real. Who are they? How much did they pay? How does that relate to some black-scholes calculation made seven years earlier, if at all? When you figure it out then perhaps we can have a meaningful debate. Because this cash that came from somewhere has very little to do with some "intrinsic value" of an option at grant. Except that one purports to predict what the other will be. In the case of disagreement, which one ends up being right? Which is an actual cost to shareholders, and which is an estimated cost? There aren't two costs. There isn't zero cost. There just is a cost. And its value is....? Then, as a consequence of the loss of the tax benefit, the representation of profit to the shareholders. You are assuming that the reaction to the bill would be for boards of directors to approve non-reporting of stock option expense. If you think about it for a while you are suggesting that boards will minimize shareholder value (corporate assets) by not taking a tax deduction in order to maximize apparent profitability? Anyone who invests in such sham companies would deserve what they get. John