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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Stock Farmer who wrote (64158)	6/1/2003 5:13:40 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 77400

So a very small fraction of the shares have a great impact on stock price. If you were to write options into such a scenario, you run the risk of the market-maker being counter-party to your position. As if this has no relevance to pricing options as to what their "expense" to the company is? It is the same issue. You can't price options expenses for the same reason you can't price stock options. Therefore they are unavailable. I have said before that using black scholes is an issue. The more you look into it, the more holes you find. If I were in favor of options expensing, I would dump black scholes and expense at exercise. I'm not sure why so many are in favor of black scholes, could it be that you feel a need to attach the expense at grant because that is a cleaner linkage to compensation? Well, as we have seen, just because you have an opinion doesn't mean it's correct. Right, and as we have seen John, just because YOU (or the multitudes of beancounters that follow you around on SI) have an opinion as to the ramifications of an expense and its correctness wrt the income statement, doesn't mean that there are no other issues attached, or that doing something in order to make beancounters happy is necessarily the right thing for the overall economy. You don't have the evil tech lobby to blame anymore if options expensing doesn't go through really... the unions are on the side of expensing and the tech lobby has been marginalized at this point anyway. John Doerr is privy to Google's actuals, and my guess is he is parrotting those numbers all over congress, in an attempt to illustrate what BS will do to new IPOs and the mandate that options expensing is supposed to serve- improved visibility. In fact I heard a rumor to that effect a few mos ago which is why I brought up Google on this thread. So here is the case study right in front of you, all you have to do is make options expensing work, such that accurate expenses are reflected (not overstated) and Google ends up looking like the star that it is.