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

To: Casaubon who wrote (38929)	8/14/2002 9:24:48 PM
From: TimbaBear	Read Replies (2) \| Respond to of 52237

Casaubon I happened to be doing an analysis of INTC tonight and came across the following excerpt in their most recent 10K and it reminded me of a portion of our recent discussions. It appears as though their CFO doesn't understand Black-Scholes either. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in the opinion of management, the existing models do not necessarily provide a reliable single measure of the fair value of employee stock options. Timba