Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: rkral who wrote (62936)	2/5/2003 6:40:05 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 77400

fyi - Siebel's Case Shows a Hole in Black-Scholes 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. thestreet.com Note that the issue is the difference between the two values, actual cost on the income statement vs. "estimated cost" in the footnote... not whether something should be deducted on the income statement or not, just the delta between the two values and which is more correct. It isn't just siebel pretty much every high flying tech company has this same issue.... or (imo) any company on a 4 year business cycle peak to trough which hires at peak (intuit is like that). Lizzie