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To: augieboo who wrote (70059)	3/31/2003 3:10:37 PM
From: Frederick Langford	Respond to of 209892

When it rains, it pours: Reuters Options cost would cut eBay 2002 profit 75 pct Monday March 31, 2:37 pm ET PALO ALTO, Calif., March 31 (Reuters) - EBay Inc.'s (NasdaqNM:EBAY - News) 2002 net profit would have been cut by 75 percent if it had expensed employee stock options based on their market value, the online auctioneer said in its annual report filed on Monday. ADVERTISEMENT EBay's 2002 net profit would have been $62.9 million, or 21 cents per diluted share, if it had used the fair-value method for figuring the cost of employee stock options, the San Jose, California-based company said in a footnote to that report. Using a narrower accounting standard that considers only the difference between the market price of the stock and the exercise price on employee options, eBay reported a 2002 net profit of $249.9 million, or 85 cents per diluted share. Companies have the option of treating stock options as an expense or disclosing their fair-value cost in the footnotes of their annual reports. The Financial Accounting Standards Board, which sets accounting standards in the United States, has added a new project on stock options to its agenda. It has not said whether it will force companies to expense options, but many in the investment community expect it to do so. High-tech companies have long used stock options as compensation and many are lobbying against such a change, which is expected to significantly reduce reported profits at many firms. EBay's stock is one of the best performers on the Nasdaq market. On Monday, eBay fell $4.39, or 4.9 percent, to $84.90 in afternoon trade, but was up about 50 percent from its closing price of $56.49 on April 1, 2002. Fred