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

To: Lizzie Tudor who wrote (173593)	3/15/2003 8:53:28 PM
From: rkral	Respond to of 186894

OT ... Lizzie, I'm sure glad you're stepping in for Mr. Barrett. Because it just hit me, Mr. Barrett is probably very biased. Think about it. If the FASB succeeds in mandating option expenses, do you think INTC's reported earnings will decrease? If earnings decrease, do you think this will put downward pressure on INTC stock prices? If prices decrease, do you think the value of Mr. Barrett's stock options will decrease? If the option value decreases, do you think Mr. Barrett will have less money in his pocket? So do you think Mr. Barrett might be biased? Sorry, I drift off the topic of the post. Since you interjected, perhaps you would point-by-point comment on questions left unanswered in Mr. Barrett's interview. (1) Is the $3 billion a pre-tax or after-tax number? (2) Over the last 7 years, what would INTC have been charged in expense for stock options which ARE NOT today under water? Of course, this should include exercised, as well as unexercised, options. (3) Over the the last 7 years, INTC has granted options with a total expense liability (fair value per SFAS 123) of $13 billion. The implication of the interview is that $10 billion should not be expensed because some options, those associated with $3 billion of expense, are under water. Isn't this notion patently ridiculous? (4) Do you think those underwater options will remain underwater, when there's 3 to 9 years of option life remaining? (5) Don't you think Mr. Barrett is dis-incentivizing the employees holding those underwater options, by implying they will remain underwater? And then you bring up some interesting new points: (6)By "it is perhaps possible that there was a market for intel stock options to the tune of 3 billion", do you mean the ESOs option volume might be too big for the public market? If not, what do you mean? (7)Since Intel is a large company, whose stock is publicly traded with a large daily trading volume, your point about emerging growth companies is irrelevant, IMO. Don't you think Intel was all of those for the 7 years under discussion? (8) By "risk premium", are you referring to the increase of option value caused by an increase in price volatility? If so, price volatility is real. Therefore, the "volatility premium" is also real, and it is not a "phantom value" as you say. Simple straightforward logic. The weak point is the volatility must be estimated for the future. But I know of nothing or no one that can do better. Do you? Another difficulty arises when stock is not publicly traded, but the SFAS 123 fair value method says "do the best you can", restating. Logically, this means a non-zero value. To borrow a phrase, "financial statements should strive to *be approximately right* in reflecting economic reality, rather than precisely wrong". Regards, Ron

To: Lizzie Tudor who wrote (173593)	3/17/2003 2:19:45 AM
From: Amy J	Read Replies (2) \| Respond to of 186894

Hi Lizzie and Thread, RE: Centrino This seems to be the first product, in awhile, that's beginning to generate some interest in the engineering community around here. Anytime I've seen that happen, it eventually spreads to the overall community a few months later. I think the Centrino will do very well. On the business front, this weekend, I have heard some people talking about wanting to replace their own systems - small talk I haven't heard in awhile. The 2000 products are getting old (equipment failures, rebootings, OS/security, slow systems for a few in eng or mktg though not acct'g). But wanting to replace a system is different than actually spending money to replace it. At our startup, in 2000, aside from a few notebooks, we mainly bought PCs because they were so much cheaper than notebooks (such is how frugal startups are), or people bought their own notebooks or they shared the few we had which is now nearly impossible to do. This time around though, we'll eventually replace systems with notebooks, except in acct'g. Engineering is mixed with both systems and notebooks, but mainly systems. At home, I'm hoping my system will last a few more months, it's showing a lot of issues over the past month. At work, a couple of us will purchase a Centrino after a few months - q1 is not good so purchases will be pushed out. Once this war situation blows clear, I think the industry demand will generate quite nicely. This has to be as low as it gets in terms of demand - war, terrorism, high gas prices, pneumonia, in-between a buying cycle, and bad economy. I bet we see healthy demand for wireless notebooks and upgrades by year-end, based upon the number of people I know that are talking about upgrading their systems. I haven't asked how other startups are doing these days, but our business is going to have an unhappy quarter. That wonderful breaze we all felt in Dec, isn't with us in this quarter. It's as if capital spending is frozen like a deer in the headlights of an oncoming war. We've had to put customers on a schedule. RE: The health threat (atypical Pneumonia) It doesn't seem to be as serious as what the initial reports claimed - while it appears to be spreading incredibly fast, only <2% died from it in an outbreak last Nov. Though, other reports say it has not been confirmed to be the same bug. Regards, Amy J