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To: Don Lloyd who wrote (16456)	8/10/2002 12:05:52 AM
From: SOROS	Read Replies (1) \| Respond to of 42834

"They have exactly the same liquidation value for either selling their shares or for the company itself being liquidated." You may want to check "liquidation value" versus "market cap" for just about every company. That will show the true lunacy being exhibited in those buying this market because it is now "value" or "near a bottom." I can't believe they keep parading analyst after analyst on the TV telling the average investor that the markets are now "value." By just about every traditional measure, this market is about as overvalued as it has ever been. Only by "comparison" with stock "prices" of 2-3 years ago does this value statement make any sense --- and it only makes sense to an idiot or someone who is paid to part an idiot with their money (aka analyst). "Alternately, the company can execute a reverse split to lower the number of outstanding shares." -- Tell me this is not robbery of shareholders in the practical. "Still more alternately, the shareholders no longer have to worry about the company doing dumb things with that $100,000." -- If the "smartest" thing a company can do to grow their business is buy back shares, I'd say it is not a company that can be trusted. IMO, unlike the talking paid shills on TV who say Enron, WCOM, TYCO, etc. are only a tiny minority of the crooks, I'd guess it is more like 80% have done versions of the very same things -- they have just not been caught yet. I remain, SOROS

To: Don Lloyd who wrote (16456)	8/10/2002 11:13:45 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 42834

From the POV of the shareholders, this is an economic non-event. tell enron employees! saw a guy who saw his $1.3 million in retirement go to $0. he was 65 years old. options don't always provide the incentive management thinks, eh? anyway, you keep banging your head against the tree and don't see the forest. assume there are two courses of action a company can choose to keep their dilution at 0%. 1. offer options and buy back shares equal to the exercised options... WITH SHAREHOLDER CASH (shareholders own the company). 2. don't offer options and don't SPEND SHAREHOLDER MONEY to offset the dilution. who has more cash, all else being equal? answer this question. don't dance around the elephant in the middle of the room. the answer to this question is how much options cost a company that offsets their options with stock buy backs. scenario 2 has more cash and they both have the same outstanding shares. the difference is the CASH cost of the options b/c ONLY THE OPTIONS were responsible for the CASH used to offset dilution. no options = no dilution = no cash outlay required to buy back stock. that is simple. you keep arguing these two scenarios are EXACTLY the same to the shareholder. this is wrong. totally wrong.