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To: paul_philp who wrote (52116)	7/15/2002 11:24:32 PM
From: stockman_scott	Read Replies (1) \| Respond to of 54805

RESEARCH ALERT-Merrill says Dell only tech growth stock NEW YORK, July 15 (Reuters) - Merrill Lynch's top equity strategist on Monday said that, with the exception of Dell (NasdaqNM:DELL - News), the tech sector was a sell, and investors should sell the sector into strength at every opportunity. Merrill Lynch said that Dell's announcement last week that it would beat its own guidance for second-quarter earnings gave a lift to the technology sector, but that Dell's growth may be coming at the expense of competitors. "Our view remains that investors should sell technology shares into strength at every opportunity, and re-deploy those assets over other sectors. However, Dell might be an exception to our strategy," Merrill Lynch chief U.S. strategist Richard Bernstein wrote in a research note. "Dell appears to be a true 'growth company' within a sector of faux 'growth stocks,"' he said. Dell shares were up 7 cents at $25.10, from its Nasdaq closing price on Friday, after opening lower. biz.yahoo.com

To: paul_philp who wrote (52116)	7/16/2002 11:16:59 AM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

where there is a debit there must be a credit somewhere Within a taxable unit, yes, but not necessarily between taxable units, at least not at the same time. The corporation is on an accrual basis, recognizing income and expense as it is incurred, not when the cash flows. The employee is on a cash basis and has not taken "constructive possession" until the option is exercised.

To: paul_philp who wrote (52116)	7/16/2002 1:04:43 PM
From: EnricoPalazzo	Read Replies (2) \| Respond to of 54805

Ignore for a moment the consequences. You should be a politician <gg>. I couldn't possibly put it more succinctly than Thomas has, but let me just add that nothing prevents the employee from including the value of the options when she calculates her own net worth / earnings (this is analagous to the income statement / balance sheet). But when the tax man cometh, neither employee nor employer tells him about the options until they're exercised, which is as it should be. By the way, high-tech option:salary ratios are generally fairly small initially (maybe 1:3), but as employees become more senior, the option values do start to dominate the salaries. Being a peon, I can't know for sure, but I doubt that the example I gave is that out of line for people with that kind of salary at MSFT, or CSCO, or INTC, or SEBL, etc. Also by the way, I agree that expensing the options (GAAP, not taxes) as they vest is the logical way to do it. This is, from what I understand, how KO will be doing it. Ethan