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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (15043)	8/3/2002 1:11:03 AM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 78516

TimbaBear, Thanks for taking your time to dig out the specifics on these put options. I knew there was a serious problem with this game they were playing. One of these days this stock is going to trade for Graham's fair value as the market will take care of companies that are playing these games. DELL is not the only technical company disaster waiting to get marked to market at fair value because the management has lined their pockets with sharehold equity. IMO, this bear has a long way to go before it is done eating for the long winters nap. Joan

To: TimbaBear who wrote (15043)	8/3/2002 10:18:40 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78516

Timba, Dell's problems with puts are somewhat unrelated to the their option story. Selling puts was a market speculation: it worked well in bull market, it backfired in bear market. It is like buying shares at the same time as options are issued. If shares go up and options get exercised, this is a smart move. If shares go down, it is a stupid move. On the other hand, if company does not buy stock when it issues options, it loses in bull market and wins in bear. BTW, Dell cannot cover their put obligations by issuing shares, since they have an obligation to BUY shares, not to SELL. Unless they decided to sell enough shares to be able to buy them under puts for much higher prices. This would be totally stupid. This is not to defend Dell, just to clarify two points. Jurgis