Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Boca_PETE who wrote (64742)	9/19/2003 12:59:13 PM
From: Lizzie Tudor	Respond to of 77400

The IPO situation is that if you require options to be expensed, the minute a new, hot IPO comes out there will be billions of expenses on the books as the founders take cash on the first days of trading, plus the high beta of a new IPO adds to the mix. So say you have a company like Google with tens of millions of options on the books, and a new IPO valuation of 4 billion. The pre-IPO options are granted at pennies. The expenses on these options are going to equal the valuation of the company in some cases, Google may be one. Realize that Google is the hottest pre-IPO company since ebay or yahoo. From a financial perspective, expensing Google options, or any "hot" IPO- penalizes the company for being hot, and the result is so extreme it is hard to justify, unless you want to turn off the IPO engine.