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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (173047)	2/12/2003 1:56:44 PM
From: GVTucker	Read Replies (1) \| Respond to of 186894

Tenchusatsu, RE: I thought it was the stock buyback that causes the net decrease in book value. Options only dilute the stock, i.e. negate the only benefit of stock buyback. Certainly, buying back stock at a price above book value will decrease book value. But in DELL's case, that wasn't the only reason. In essense, this supports what Ali has been saying all along, that companies only buyback stock just to give them away as option exercises. No, not true. Yeah, in Dell's case it is accurate, but in contrast look at Intel. Book value has declined by a bit over the past couple of years, but there hasn't been the precipitous drop in book value per share like there has been with Dell. And that is because the buyback has been additive on top of the antidilutive effort against employee options. At the peak in Q3 '00, Intel's diluted shares outstanding was 7.007 billion shares. At the most recent report, Q4 '02, diluted shares were 6.660 billion, for a net decline of 347 million. In contrast, over the same period Dell's diluted shares have declined by 92 million. More telling, the book value for per share Intel was $5.60 and $5.38 respectively, a slight decline. The book value per share in the two cases for Dell was $2.49 and $1.80, a much larger decline.