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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: IceShark who wrote (6988)	11/4/1997 3:48:00 PM
From: Bearded One	Read Replies (3) \| Respond to of 18056

Harrumph. I seem to have jumped into pickle juice on this one. Ok, say a company with a ten million shares at 100 dollars each either: 1) gives a dividend of 50 cents per share -> 5 million dollars or 2) grants 50,000 option shares, which are cashed in at a cost of 5 million dollars. I suppose, it's really more like this: 2a) grants 100,000 option shares at 50$ strike, which are cashed in at a cost of 5 million dollars. Really, what's going on is a transfer of stock out of the marketplace and into 401K's. In which case, it makes sense to buy companys which grant excessive amounts of options and wait for the buybacks. Now Microsoft doesn't look quite so overvalued. Here's a plan: Short Squeeze a small company with the company itself playing the role of the short seller! You can drive a company bankrupt as its stock goes up!