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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Ali Chen who wrote (174852)	5/14/2005 9:20:40 AM
From: Thomas Duttera	Read Replies (2) \| Respond to of 176387

Options: Ali or Ron, When employees exercise options, don't they have to pay something? If so, the only money really being used by Dell is the difference between to strike price and the market price. So if the strike was $30 and the employee exercised an option at $40, Dell is only out $10. Right? Also, since diluted shares includes unexercised options, doesn't the ongoing calculations of earning per share really include the impact of stock options? Thomas

To: Ali Chen who wrote (174852)	5/15/2005 10:28:03 PM
From: rkral	Read Replies (1) \| Respond to of 176387

Ali, re "However, given an average price of $30 last quarter and $2B paid, [ed: Dell] bought back about 60,000 shares." Dell said it "repurchased more than 50 million shares of its common stock during the quarter for $2 billion ..." www1.us.dell.com Most likely "more than 50 million" means between 50 and 51 million shares. No need to estimate an average price below the lowest price of the quarter ... or slip a decimal point 3 places. re "Yet the number of actual float got smaller by only about 30,000 shares. Therefore it is reasonable to assume that about 30,000 shares were re-issued and exercised." I don't think [ed: 30 million] options exercised is at all reasonable. Dell did not disclose shares outstanding at the end of the quarter ... and does not use the term "float". re "but the total expense and labor cost misrepresentation is still significant, would you agree?" Were we talking expensing options, I would agree ... since Dell uses the intrinsic value method for options, which yields $0 expense. Ron