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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (29403)	3/3/2003 12:34:13 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 74559

Don, No not really. The value of 1M$ of stock sales is 1M$. By definition. I'll grant you the cost of the ink is negligibly close to zero. But that's beside the point. It's about 1 M$ worth of stock... what's it worth? Whether it brings 1M$ worth of dollars into the treasury which can then be spent buying 1 M$ worth of labor, or buys 1M$ worth of labor directly... same thing. Shareholders part with 1M$ on the one hand, which is a cost to them of 1 M$. Which cost buys them a benefit equal to whatever benefit occurs after 1 M$ worth of labor, either way - whether it goes through treasury first or not. Same "dilution", same cost to shareholders, same benefit to shareholders, same everything... oops, um... except for a different reported P&L... er... geez... maybe we fix that? Get it? If a cost is not a cost 'cause it attracts benefit, then surely we are way out of line accounting for any salary as cost. Whether it's in shares or dollars. 'Cause presumably when we pay an employee $1 for $1 worth of work we get the benefit of $1 worth of work. Whether we pay that $1 in cash or $1 in stock. Conversely of course, if a cost paid in dollars is a cost, then surely that same cost paid in shares of equivalent value (to shareholders) is the same cost (to shareholders). Despite your protestations to the contrary. Cheers, John.