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To: GST who wrote (150268)	11/18/2002 9:41:21 PM
From: Victor Lazlo	Respond to of 164684

i can't think of any good reason.

To: GST who wrote (150268)	11/18/2002 10:01:16 PM
From: John Chen	Respond to of 164684

GST,re:"why...prop up their regime". We did it ALL THE TIME, and ALL OVER THE WORLD!! This is almost the LAST ONE STANDING. We can't let it fail, again and again.

To: GST who wrote (150268)	11/18/2002 10:08:24 PM
From: Victor Lazlo	Respond to of 164684

Palestinian “Preventive Security” center in Gaza city raided by large Israeli force Sunday night was weapons, ammo manufacturing and supply center for Fatah, Hamas, Jihad terrorists. Its personnel took part in terror strikes. Large cache of intelligence documents captured with piles of war materials

To: GST who wrote (150268)	11/19/2002 9:37:53 AM
From: Oeconomicus	Read Replies (1) \| Respond to of 164684

Siebel's Case Shows a Hole in Black-Scholes By Ronna Abramson Staff Reporter 11/19/2002 06:59 AM EST Just days after an international board recommended expensing stock options, Siebel Systems (SEBL:Nasdaq - news - commentary - research - analysis) offered a novel example last week of how that can become a messy proposition. The San Mateo, Calif.-based maker of customer relationship management software said it intends to report in a footnote of its 10-K filing at the end of the year that the estimated cost of employees' unvested options with a strike price of $40 or more will reach up to $650 million. That footnote, required under accounting rules, won't affect the company's bottom line. Instead, Siebel will deduct the amount of cash and stock the company is actually paying to cash out those same out-of-the-money options. And that cost, which will affect its income statement, comes to only $54.9 million -- just one-twelfth of the $650 million charge to be disclosed in the footnote. So, what gives? The huge gap between the estimated cost Siebel will disclose in a footnote and the actual cost the company will deduct on its income statement illustrates a flaw of the formula used to estimate options expenses, which is especially dramatic when stocks swing as wildly as they have these past couple of years. And it buttresses the case of those companies arguing against holding them to a model that overestimates the value of outstanding options. "This [Siebel] really is a case study. It's a perfect example of a major shortcoming of the Black-Scholes model, where it doesn't accurately depict the true expense," said Friedman Billings Ramsey analyst Daniel Ives, referring to the formula named after economists Fischer Black and Myron Scholes to calculate option values. Ives has a market perform rating on Siebel. His firm hasn't done any banking business with Siebel. Siebel's $650 million value for the options, calculated using the Black-Scholes model, stems from an unusual offer by the company to buy out unvested options with an exercise price of $40 or more. Siebel ended up exchanging 28.1 million options -- 88% of those eligible -- at a cost of $51.9 million, or $1.85 per share, in cash and stock; with payroll taxes and other charges, the cost came to $54.9 million. According to accounting rules, however, Siebel is required in its footnote to use the value as determined by the Black-Scholes model at the time the options were granted, about 2 1/2 years ago, when the stock was trading at more than $100. Under accounting rules, the company had to spread that cost over the vesting period of the options -- three or four years in Siebel's case. As a result of its exchange offer, Siebel canceled the options early and consequently had to accelerate its recognition of the $650 million "expense" this year. The reduction in outstanding options, meanwhile, will mean Siebel's estimated expense will drop in the following years. ... "Procedurally, I understand it [the charge] . Economically, it makes no sense," Rappaport said. "That amortization is premised on the idea that this is the value, assuming it would continue to be outstanding. It turns out you don't need to guess on those anymore because there are some checks written and stocks issued." ... Siebel CFO Ken Goldman called the $650 million estimate "meaningless" and a "fictitious expense," though he said the company informed investors that it would be included in an upcoming footnote in the interest of "clear disclosure." Like other opponents to expensing stock options, Goldman argued in an interview Friday that being forced to move that cost from a footnote to the income statement would merely create another form of pro forma earnings because analysts would likely deduct the options expense to get a clearer picture of the company's operating performance. ... Meanwhile, Siebel has recently decided to issue fewer grants in the future, Goldman said. The company, known as one of Silicon Valley's most generous distributors of employee options, reduced its outstanding stock options by 21% between Dec. 31 and Sept. 30, in part because of layoffs, according to the company's filing last week with the Securities and Exchange Commission. Goldman insisted the possibility of being required to expense options in the future had "zero" to do with its exchange offer and the decision to offer employees fewer options. Rather, Siebel wanted to eliminate the distraction of out-of-the-money options to employees, Goldman said. "In today's environment, employees don't value options as much as they used to," he said, explaining why the company is limiting future grants. The company has not raised salaries to make up for fewer options because it believes the pay is still competitive, he said. rd.yahoo.com*http://www.thestreet.com/_yahoo/tech/ronnaabramson/10054858.html