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

To: j g cordes who wrote (27665)	11/2/1997 12:10:00 AM
From: J R KARY	Read Replies (1) \| Respond to of 58727

Jim a corporation should timely disclose intentions to buy/sell its securities , but ... I am unaware of any formal SEC requirement to report intention only the actual buy/sell . I suspect market fluctuations due to the announcement preclude reporting . A lack of ethics surely arises with a "insider" who is solely aware of the intention and acts on it . I have never seen a insider report reflecting option activity and wonder if there is a loophole...er "reporting defect" ? Mr. Gabelle (CDA Investnet) poses a "reporting defect" where a insider buy/sells knowing that SEC disclosure will influence the stock price . A further "defect" would be where the company has quietly acquired options to use them to compensate the insider for influencing their stock price . In my past life I was taught this is conspiracy yet the polite stock market term remains "defect" , and if you keep asking questions the loophole will eventually be called unethical , but never criminal. Regards, Jim K.

To: j g cordes who wrote (27665)	11/2/1997 2:18:00 AM
From: AlienTech	Read Replies (2) \| Respond to of 58727

JG there is a lot of market manipulation going on in the market. There is not a damn thing you can do about it. Just like there is a lot of politics going on in politics. When the big boys fight we might hear some stories etc but I dont think you and me count in that. The only reason we even know about some of this is cause of forums like SI. A few years ago we would all be blind and as dumb as can be. The big brokers now even want to ban Level-2 quotes so we cant even see the little bit of open market stuff they do and there isnt much going on in the open market. Another thing is options are not stock, company insiders are allowed to trade them as they wish, eg ADSK just before they released their V7 (I think) upgrade has a lot of call activity by everyone including top management and it was public knowledge as well.. They openly said they would blow away estimates etc.. Companies manipulating their own stocks is not any different than institutions manipulating a companies stock. Once you understand the game theres a lot of money to be made. Eg take a look at PSFT and BMCS with high institutional ownership, even the big boys have a hard time tanking and keeping those 2 companies down.. They support the stock price as long as the company looks good to the public. Unlike companies like CYMI which pissed off a few analyists and now trade at a 50% discount cause of it, fundamentals has nothing whatsover to do with it.

To: j g cordes who wrote (27665)	11/2/1997 11:28:00 AM
From: Patrick Slevin	Read Replies (1) \| Respond to of 58727

What I perceive to be your idealism on this issue may be valid... ..I have never given it much thought. It always seemed to make good business sense to me. Nor have I ever questioned how a CFO arrives at how many puts or what strikes. I merely presumed that; ¯ A company decided to enhance shareholder value thru a stock repurchase program. This, in itself, is admirable to me... in the past too many companies have gone on acquistion binges with their earnings. This may or may not enhance value downstream. A stock repurchase, on the other hand, lends validity to the theory that a company's management believes in the quality of it's earnings and has faith in it's future...at least near-term ¯ There was a rational method arrived upon to achieve this repurchase. For example, the figure of 100 million dollars was allocated to this endeavor. However that number was arrived at, I don't know. I would imagine it was a decision based on some awareness of what excess earnings would be left over after taxes, dividends, et cetera, in the coming period. These guys have to have some idea what projected earnings would be, yes? Now, presumably, these people have some financial acumen. One would hope so. I, for one, would be concerned if Intel or who ever was run by a bunch of engineers without anyone up top that could converse intelligently with an investment banker on something other than differential equations. Logically, then, this would not be a willy-nilly decision. "Hey Bob! The market just crashed! Let's sell some putz!!!!" It did not do Victor N. any good and, in theory at least, he knew what he was doing. (Of course, he was probably trying to play catch up on that other wise move he made in Thailand the day before) So....here's a company that decides it's stock is undervalued at $20. It has 100 very large to go. At $20 it can buy up to 50,000 shares. How does it do it? I doubt it would send a Stanley Druckenmiller in and tell him to sit on the bid....it would also be a waste of time to the company to "time" the market so buy on the dips.... It may be that it's prudent to write 5000 puts at $20...perhaps some more at 17.5 -- then buy some stock with the proceeds plus a portion of the original nut. This is not speculation, to me, this is a plan. As long as it is a reasonably thought out plan....as long as they were committing the funds to a buyback anyway....it seems to take a lot of the guesswork out. If IBM announced a buyback program, one does not expect IBM to enter the market the next day and "take it and bid it" until they run out of cash. On the other hand....who would want IBM to hire some rocket scientist to decide when to time the re-purchase...just so he can waste the board's time to get the okay. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Anyway, I'm too long-winded about this.... I understand that you prefer to see the monies re-invested in growth. I believe that putting some of these monies into a re-investment in company stock adds to growth. A strong stock price is very helpful for raising capital if necessary. Re-purchased shares can be used for employee incentives, for leverage in mergers or acquisitions (another form of growth), ...and if I might have to benefit from any given company's positive stock action as the result of a stock re-purchase program, by gum I'm just gonna hafta live with it, Gawd Bless America. ”¨” ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'' \|* * * * * * * * * * OOOOOOOOOOOOOOOOOOOOOOOOO\| \| * * * * * * * * * :::::::::::::::::::::::::\| \|* * * * * * * * * * OOOOOOOOOOOOOOOOOOOOOOOOO\| \| * * * * * * * * * :::::::::::::::::::::::::\| \|* * * * * * * * * * OOOOOOOOOOOOOOOOOOOOOOOOO\| \| * * * * * * * * * ::::::::::::::::::::;::::\| \|* * * * * * * * * * OOOOOOOOOOOOOOOOOOOOOOOOO\| \|:::::::::::::::::::::::::::::::::::::::::::::\| \|OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO\| \|:::::::::::::::::::::::::::::::::::::::::::::\| \|OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO\| \|:::::::::::::::::::::::::::::::::::::::::::::\| \|OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO\|