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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: SpecialK who wrote (38894)	8/12/2002 11:58:01 AM
From: Casaubon	Read Replies (1) \| Respond to of 52237

Sorry, I don't understand the point of your post. Tech, non-tech, cyclical, non-cyclical, whatever. Options need to be expensed. every option I've received to date is underwater or expired underwater, even with a large number being repriced lower. exactly. Thats' the risk of the person recieving the option. The dilution effect is the risk of the stock holders and, the value of the options granted is the responsibility of the issuing company In your case, so far, you have garnered no value. That is not to say the options are valueless. They still have time value premium. If they never get exercised for money on your part, they still had time value for the period of the option grant, just as if you had purchased options over the counter which expire out of the money. The cost of that time value is what needs to be expensed, just as if the company had gone into the market and purchased options over the counter and given them to you, at no cost to yourself. This is an inducement on the part of the granting company to attract talent in lieu of cold hard cash pay up front. In other words, it's a back end loaded form of compensation which is supposed to incentivise employees to do a beeter job, to cause profitability to increase, to benefit compnay, shareholder and, employee alike. The cost of that benefit can be approximated over time or calculated precisely at the time of exercise.