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

To: Ali Chen who wrote (180955)	4/30/2005 9:51:47 PM
From: Elmer Phud	Read Replies (1) \| Respond to of 186894

Ali The only practical importance is that you repurchase shares at current market value while giving them away at designated value at the time of grant, which is always smaller than the market. No, it is always exactly the same as the grant value. That's the point.

To: Ali Chen who wrote (180955)	4/30/2005 10:52:28 PM
From: rkral	Read Replies (1) \| Respond to of 186894

Ali, re "I see that you agree that the whole scheme can be reduced to "Step 4" only: "repurchase, retire, re-issue, give away", all other steps are irrelevant and do not change the net outcome." No, I said nothing about relevance of any of the steps. re "[ed: the company] repurchase shares at current market value while giving them away at designated value at the time of grant, which is always smaller than [ed: today's] market." When a company repurchases many more shares (almost) every year than shares issued for option exercise ... it eventually is behaving like a covered call writer, which is ephud's point. Take a look at Intel's 10-K filings for the last 9 years ... and add up the numbers. Options outstanding at 2004 year end 884MM Shares issued for option exercise 1996 thru 2004 750MM Total 1,634MM Shares repurchased 1996 thru 2004 1,645MM So even if all options outstanding were exercised (which won't happen) ... Intel has already repurchased enough shares to cover that PLUS all the shares issued for option exercise during the prior 9 years. IOW the shares being repurchased today can be considered to "cover" options granted today. However the same could not be said a year ago ... without assuming a large number of options outstanding would be cancelled. Ron P.S. All share numbers are split-adjusted.