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

To: Tushar Patel who wrote (174364)	5/5/2003 1:15:30 PM
From: hueyone	Read Replies (1) \| Respond to of 186894

Hypocrasy from Intel? online.wsj.com Expensing Options Won't Create a 'Disaster' With regard to Craig Barrett's April 23 editorial-page commentary " 'Kind of Right' Isn't Good Enough": Mr. Barrett takes issue with the FASB's preferred accounting for stock options, which would recognize an expense for the value of options earned by employees for the service they provide in a given period. He claims that the use of the Black-Scholes model permitted by that accounting produces "results that are inherently inaccurate and unreliable for this purpose" and that the model is "unworkable." Mr. Barrett should take a closer look at his own company's financial statements. When it comes to determining the fair value of equity options and warrants (which incidentally, have longer lives than what the Black-Scholes model was designed to handle), Intel states in its accounting policy footnote that it uses a Black-Scholes option pricing model. How can it be inherently "inaccurate and unreliable" and "unworkable" when applied to employee stock options, yet perfectly fine when valuing financial instruments held by the company as assets? The answer is clear: When you do the math in Silicon Valley, the only acceptable value that an option can have when it is given to an employee is "zero." Jack Ciesielski Baltimore Updated May 1, 2003