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

To: Thomas Duttera who wrote (174865)	5/14/2005 9:21:05 AM
From: Thomas Duttera	Read Replies (1) \| 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: Thomas Duttera who wrote (174865)	5/17/2005 10:58:55 AM
From: Ali Chen	Read Replies (1) \| Respond to of 176387

"When employees exercise options, don't they have to pay something?" Yes, they pay the strike price. According to report, dell.com employees paid back to Dell $161M. This makes the average strike of about $8 (assuming my gestimate of 20M exercised shares is correct, see my post to Ron). Must be mostly 10-yrs old options close to expiration. "Also, since diluted shares includes unexercised options, doesn't the ongoing calculations of earning per share really include the impact of stock options?" The un-exercised options are just as they are, un-exercised. They might be exercised, they might not. Therefore, technically speaking, "the impact of stock options" is really an unknown when repored in the bulk number. This is not the point, the point is that the total earnings are severely overstated, every quarter. This is the real (but unaccounted) impact of stock options. - Ali