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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: DiViT who wrote (71194)	7/16/2002 4:36:16 PM
From: jonkai	Read Replies (1) \| Respond to of 74651

How do you know it's 30%? Is it listed in the financials? it all depends on how they expense options, but to get a good idea, yes past expensing of options as an alternative way of showing earnings is shown way back in the back of their earnings reports....so yes, they are in none street reported financials...and only if you know where and how to look for them..... the new GAAP requirements ofcourse would move these alternative way of reporting earnings up front where the street can see them.... and those numbers in the back of the reports show hits of about 30% in past reports.... future reports depend on many things..... mainly, how many options MSFT issues, so that say in four years, will they have 600 or more million new options in three years?..... 800 million in four? if they don't issue that many more, then their cash flow goes down by 30%.... because this is where they were getting a lot of their cash flow, (and the tax benefit from them)..... also listed in their financial reports is this tax benefit, and the benefit from these ESO to cash flow..... like taking money directly from shareholders hands and putting it in a MSFT bank account that MSFT employees instead have control over.... and so far, they haven't issued ANY of this money to benefit shareholders..... NONE........ now.... that all being said, MSFT may use this money in the bank account to finally benefit a shareholder.... course they will have to stretch it far, because their debts are already more than the cash they have to buy it all back..... they could buy back shares..... a good idea when the stock gets low enough, but it isn't that low yet....... they could provide a dividend...... not as great an idea.. or they could increase earnings...... but this still hasn't panned out in the past few years........ jon.