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To: Lizzie Tudor who wrote (178222)	5/29/2004 11:39:42 PM
From: Elmer Phud	Read Replies (2) \| Respond to of 186894

Lizzie - Whenever I bring up JNPR or RHAT, all I hear is "yes but it works for Cisco". So what. The USA is not a country that exists only for mature companies. If bs doesn't work for up and coming growth companies then it doesn't work, it seems to me. In other words it works for the one it works for so disregard the rest. Like you, I am less that persuaded that the BS model is anything more than a rough estimate in the absence of a crystal ball. What would it take to say that BS has accurate predictive value? Seems to me that someone would have to show that over time the BS model predicts the breakeven point for options buyers going forward. How good is prior data at predicting the future? Like TA, it's perfect at telling you what happened but lacking in telling you what will happen.

To: Lizzie Tudor who wrote (178222)	5/30/2004 12:15:38 AM
From: rkral	Read Replies (1) \| Respond to of 186894

OT .. Lizzie, re "The black scholes model is off by a factor of 10, simply because JNPR for example issued a TON of options from 98-2000 when their stock was gyrating madly, and shortly thereafter proceeded to lay these people off." I think your "off by a factor of 10" is a WAG. Just what are JNPR's "expense at grant" and "expense at exercise" numbers for fiscal years 1998 thru 2003? And while you're digging up the numbers, consider whether or not evaluating results over such a short time period -- a predominantly bearish period -- is even appropriate. Do you evaluate your long-term investment results that way? re "Almost all black scholes expenses from 99 expired worthless." Lizzie, Lizzie, that's a WAG for sure. JNPR issues options that, for the most part, expire after 10 years .. so they won't expire for another 5 years .. IF they haven't been effectively re-priced via cancellation and reissue at a lower price. If you asked on the JNPR thread, someone there could probably tell you. re "If [ed: Black-Scholes] doesn't work for up and coming growth companies then it doesn't work, it seems to me." Well, from a mathematical POV, it works. I think I presented a link in my last post that proves that .. even if you don't believe GVTucker and myself. Did you even read and study that last link? Maybe you've decided that "expensing at grant" is incorrect and the option model, be it a Black-Scholes or a binomial or even a Lizzie Tudor model, just aren't even your real issue. Is that it? Are you confusing and equating the terms "Black-Scholes" with "expensing at grant"? Ron