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

To: Amy J who wrote (173553)	3/14/2003 4:28:29 AM
From: hueyone	Respond to of 186894

So, let's look at Intel, which is what we were discussing. Wait a minute, let's back up a little. To support my suggestion that Intel (and many other companies) could be great companies again, even if stock options were expensed, I noted that Andy Grove led this company to greatness long before the recent era of handing out stock options like candy, and I am not at all convinced that Intel cannot be a great company again someday without outsourcing all its R&D to India. My phrase, era of handing out stock options like candy, was meant to refer to the recent five or six years, and to the public markets in general, not to Intel specifically. And regardless of whether Intel is currently handing out options like candy, it doesn't change the fact that Andy Grove and many other hi tech pioneers were very successful in eras that preceded the generous options grant era of today. As far as Intel in current times, there did seem to be a bit of a trend towards more and more after tax EPS being consumed by options expensing, if options were to be expensed----posted in #reply-18694085. However, I have also posted on this thread several times, that stock option expense, were it expensed for Intel in the nineties, would not have been nearly as big a percentage of earnings for Intel as it would be for many other tech companies. As recently as 1999 for example, Intel's Gaap earnings are $1.05 EPS, and its GAAP adjusted for options expense at date of grant is $0.99 EPS. That doesn't particularly bother me. As far as whether Intel's "grant rate", the yearly percentage of options granted relative to outstanding shares, increased during the nineties, I don't have the answer yet. I would suspect that during the time of the start up boom that Intel would have had to increase the grant rate to keep employees and remain competitive, but I don't know for certain. I would also suspect that an increase in grant rate would be consistent with the increasing impact on EPS that I posted above. Finally, I suspect that Carl's trouble with the inner circle would be consistent with an increase of the grant rate for the inner circle. Nonetheless, I think Intel can adjust to new expensing requirements should the FASB finally make expensing stock options on the income statement a requirement. Regards, Huey