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

To: Ali Chen who wrote (178437)	6/28/2004 12:32:03 AM
From: Elmer Phud	Respond to of 186894

Ali what is your opinion on the size of ESPP and employer matching contribution to retirement accounts, in terms of number of Intel shares? Once again you are confused. Intel has no matching program.

To: Ali Chen who wrote (178437)	6/28/2004 8:18:41 AM
From: rkral	Read Replies (1) \| Respond to of 186894

OT ... Ali, re "it is clear that the stock option grant does not resemble any kind of "covered call"." True, an option by itself cannot be a covered call, but you misunderstand. By granting options, the company is clearly a call writer. By also repurchasing shares, the company is clearly acting similar to either a naked-call or covered-call writer. The economic consequences of the two choices is clearly different. The choice doesn't, and shouldn't, impact the income statement ... as "selling" options and selling stock are financing activities, not operating ones. But the choice can certainly impact the cash flow statement, the balance sheet, and shareholders' equity per share. re "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. " By "company valuation", do you mean the market capitalization? If so, I don't think "treasury stock", if any, affects market cap. re "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?" Comment on whose argument? And where? I've twice recently stated that IMO opportunity cost is an economic concept, and not an accounting one. An opportunity cost is not expensed AFAIK. re "Also, what is your opinion on the size of ESPP and employer matching contribution to retirement accounts, in terms of number of Intel shares?" By comparison to ESOs, it's small. ESPP shares were 132 million versus 702 million option shares exercised over the last 8 years. For retirement accounts, I think Intel's matching contribution is made with cash, not stock. re "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." "A rose is a rose is a rose is a rose." -- Gertrude Stein Ron