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

To: hueyone who wrote (17770)	1/7/2003 9:29:45 PM
From: brushwud	Read Replies (1) \| Respond to of 19079

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 inferred that share repos reduced both cash and retained earnings. Otherwise, how do you account for the fact that ORCL made money in the past six months, but retained earnings decreased? 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. Yes, I know this point of view. But issuing options and repurchasing shares seem like two independent business decisions, although they can be related. Personally, I see stock repurchase as a form of liquidation, rather than as an anti-dilutive, bullish, event. If tax law is changed, companies can pay cash dividends instead, which would benefit all shareholders more equally and consistently. Because the actual price paid for repurchased shares does matter.

To: hueyone who wrote (17770)	1/9/2003 2:08:57 PM
From: JSwanson	Read Replies (2) \| Respond to of 19079

You wrote: 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. That is incorrect. I will see if I can verify the accounting treatment on the company side for both share repurchases and dividends. Take a look at the consolidated statements of stockholders' equity in the 10-K. I don't disagree with you assertion that options plans have been used to transfer wealth from shareholders to employees in a very covert way. If you look at ORCL consolidated statements of stockholders' equity you will see that ORCL depleted retained earnings by $12 billion buying back about 640 million shares. However, during that same period, the company issued, principally through option plans, about 340 millions. So, in essence, $12 billion only reduced share count by roughly 300 million shares. Regards, JS