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

To: Lizzie Tudor who wrote (179962)	12/20/2004 5:06:02 PM
From: GVTucker	Read Replies (1) \| Respond to of 186894

Lizzie, RE: Well, I will defer to you since you obviously know more about the subject of the actual application of BS than me, however this PBS news show made a pretty good case against BS as a predictor. I won't harp on this too much more, but this is the key place that Silicon Valley makes its mistake on Black-Scholes. It is not a predictor at all. It is a pricing model. If an executive gets granted Intel stock at the peak back in 2000, that stock is expensed at $75/share. The fact that the stock subsequently declined by 80% does not change that expense. It's no different if the executive was granted Intel options with a $75 strike. Those options should be expensed at the time they're granted. The fact that they would have subsequently declined to zero doesn't change their value when the options were granted and wouldn't be evidence that Black-Scholes mispriced them when they were granted.