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To: Oeconomicus who wrote (150283)	11/19/2002 10:22:26 AM
From: hueyone	Read Replies (1) \| Respond to of 164684

There is nothing really new in this article. Obviously there are a lot of options outstanding for many tech companies that have very low market value today---thus making a Black Scholes amortization charge look overdone. However, the charge against earnings using Black Scholes also severely underestimated the ultimate value of options at exercise in the mid nineties, and if a company had to buy back those options at a later date they would have had to pay a much higher price to repurchase those options than the amount that was being amortized on Black Scholes. It works both ways. The question is do you want to measure stock option expense at date of grant or date of exercise? If measured at exercise, the 55 million stock option buyback should also be included as an expense. Either way, measuring stock option expense at date of grant using Black Sholes, or measuring stock option at exercise as the difference between market and exercise, Siebel would be revealed as a major stock option abuser who exploited outside shareholders in a big way while losing money year after year. Showing stock option expense as a zero dollar expense to shareholders is pure hogwash and is a greater flaw than Black Sholes later proving to greatly overstate or understate expenses. Siebel has been able to capitalize on this greater flaw (showing expense as zero) in a big way to enrich employees at outside shareholders expense. Best, Huey