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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: brushwud who wrote (17767)	1/7/2003 7:57:28 PM
From: hueyone	Read Replies (2) \| Respond to of 19079

You certainly disregarded money already returned to shareholders in the form of stock repurchases Good point Brushwud. Perhaps share repurchases reduces both cash and paid in capital by a like amount?---in which case the underlying premise of my post would be unchanged. I will see if I can verify the accounting treatment on the company side for both share repurchases and dividends. By the way, I regard the share repurchases by companies with big stock option programs as all part of the scheme to keep real employee expense off the income statements. Nice story about that located here: bluechipinvestorfund.com Snip:For instance, it was mere child’s play for the executives to realize that if in 1982 Quant Tech had substituted employee stock option exercise profits for all its incentive bonus expense of $400 million, while using bonus money saved, plus option prices paid, to buy back all shares issued in option exercises and keeping all else the same, the result would have been to drive Quant Tech 1982 reported earnings up by 400% to $500 million from $100 million while shares outstanding remained exactly the same! And so it seemed that the obviously correct ploy for the officers was to start substituting employee stock option exercise profits for incentive bonuses Regards, Huey

To: brushwud who wrote (17767)	1/12/2003 10:47:20 AM
From: hueyone	Read Replies (1) \| Respond to of 19079

You certainly disregarded money already returned to shareholders in the form of stock repurchases in posting #17742, in which you claimed ORCL has only returned 9% on invested capital over the past ten years. Brushwud, I wanted to revisit that statement from you. I don't regard those share repurchases as money returned to shareholders like I would regard dividends as money returned to shareholders. Instead, I regard those share repurchases as a proxy for the unreported stock option expense. After all, all these share repurchases are doing is partially offsetting dilution from exercise of stock options. If I start out as a long term investor in Oracle with X percent of the company, and ten years later after many stock options have been exercised and many shares have been repurchased, I end up with less than X percent of the company (or remain even at X percent of the company), then I don't regard those share repurchases as Oracle returning money to me as a shareholder. In the long run, Oracle is taking away a bigger percentage of my ownership than it is it is returning with this stock option/repurchase game. Regards, Huey