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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: hueyone who wrote (62875)	2/4/2003 3:25:37 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 77400

Proposals trying to legislate who gets the stock options are ridiculous in my opinion. Fair enough but there are a lot of laws that legislate corporate and personal behavior on the books, so I don't see why this can't be just another one. I don't usually want to get into the endless data mining that goes on with these stock options "debates", but I do feel compelled to point out the obvious from time to time, which is that Black Scholes doesn't work. I mean after all we have a fairly simple situation here, take a sampling of tech companies and apply black scholes to them for the past 10 years and determine if it increases or decreases visibility to the shareholders. If black scholes actually clouds the issue, find something else. Thats all I am saying. I think you may misunderstand my position on this issue. When you first came to the sebl thread and were talking about expensing options I was not extremely opposed to it. It was only when I discovered that black scholes was trying to estimate the cost of unvested options and apply that to the current books as a real, legitimate expense that I changed my tune. You work in SV, do you not? Then I'm sure you must know that the business cycle is a few years and more often than not, companies staff up during the good times, grant options and then things go to hell. Not a bull or bear mkt thing, just general business. For example Intuit is hiring now, pretty agressively. This may be the top of their business cycle. Some great companies like ebay and oracle go straight up but it is uncommon. Options granted today at a lot of companies are probably going to be worth something since the mkt is in a trough, but proportionally speaking the number of option grants is small these days, simply because the SV employment pool is less than half of what it was. Lizzie edit- fwiw I also think analysts and investors are "proforma'ing out" stock option expensing for the companies that do it- amazon for example- just like John Chambers said they would. Amazon had an unstellar earnings report if you include their stock options expenses. Nonetheless the stock rallied, imo it is because the street knows these aren't real expenses and amzn continues to improve their profit picture. No way to know this of course. But amzn here is a strong stock.