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

To: rkral who wrote (178431)	6/28/2004 12:24:54 AM
From: Ali Chen	Read Replies (2) \| Respond to of 186894

Ron, "I was specifically responding to your rewrite of elmerp's scenario ...That would be true, if all the facts had been presented." I rewrote Elmer's scenario to make it closer to option grant reality, not to screwed fantasy of stock option gambling. Remember, we are talking about Intel options, not Elmer's interpretation of what the company stock option grant is. Given the reality of stock option exercise procedures as I described in another post, it is clear that the stock option grant does not resemble any kind of "covered call". Neither the company nor the employee is a legal stock trading entity like a broker is, they can't neither "cap" any security nor handle any margins account to conduct the transaction. As I described, the option stock broker gets the company stock at FMV and , which invalidates Elmer's CC theories. It also makes the calculations in my example perfectly correct. Of course, one can argue that when a company offers me a stock option grant and I accept it, we impose a virtual cap on those shares. Fine, but then, according to you, the company valuation must be adjusted for the fraction of shares with capped value, just as you tried to dispute the valuation in my example. I don't recall any stock gets such an adjustment. If it could, it would automatically solve the problem of options expensing, sort of. "We (elmerp, and you, and then I) were clearly talking about a covered call scenario." Maybe you and Elmer were, but I didn't - see above. As I side note, I see that you didn't comment on the "opportunity cost" argument. Do I take it as you no longer is a proponent of it and agree that the "opportunity cost" is not applicable to employee stock option plans? Also, what is your opinion on the size of ESPP and employer matching contribution to retirement accounts, in terms of number of Intel shares? Cheers, - Ali