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Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (727)	12/18/2004 1:17:43 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 786

Not as long as it's internal to the company and still under the ownership of the external shareholders. Yes. But what about when it's issued? We aren't talking about Management looting the company by creating more shares and leaving them in the treasury, or hadn't that crossed your mind? We're talking about ISSUING shares. If I have the only share to an envelope containing a single $5 bill, my holding is worth $5. If 3 new shares are created inside the envelope, my holding is still worth $5. If the three internal shares are distributed for $5 each to three new parties, my share is now only 1/4th of a $20 company, but is still worth $5. Since no existing shareholder value is created anew, the creation and distribution of the shares is pointless and destruction of the internal shares before distribution would be no loss. Yes. But if the three new shares are distributed for $0 each, to three new parties, then what?