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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (2132)	8/6/2002 10:43:33 PM
From: BWAC	Read Replies (1) \| Respond to of 25522

Sarmad, You certainly have every right to have such strong feelings on "theft by options". I agree that the options issued to both employees and management are excessive and out of control. But that is not a problem of valuation or expensing. It is a problem of poor corporate governance, inattention of investors to the current disclosures, inattention of mutual fund management, and of course some greed. Valuing the options on some arbitrary formula and expensing them will not change what is wrong. The rush to expense options is foolhardy because no standards have yet been agreed upon. Hundreds of what if's remain unanswered. There are no standard procedures. Here's what it really boils down to: The Black Scholes formula is what a lot of people want used. Stocks with low volatility would see less expense for options issued. Stocks (mostly tech) with high volatility would see higher expense. Thus we have the standoff where mature companies are pro expensing and younger companies are against. Example: a BLS at the money 2005 leap goes for $5, a DELL 2005 at the money leap goes for $8