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

To: xstuckey who wrote (39046)	11/5/1997 11:47:00 PM
From: Lee Penick	Read Replies (2) \| Respond to of 186894

Hi X, Re - "Know how many shares have been retired? The number of outstanding shares has INCREASED by about 20 million!" I don't believe the share buy backs are to "retire" shares. I believe they are to satisfy employee stock options, i.e. an employee gets an option to purchase shares at $80. Sometime in the future the price goes above this and the employee makes money by exercising at $80. Intel has to buy on the market at the full price. Intel used this method to incentivice employees. Its makes people care about the company because they can get rich from its success. I like the concept very much! But it does not retire shares and thus increase earnings per share. It just buys the shares back for the employee who now gets to pay below market. Motivates employees, but very expensive. Intel has massive brain power at HQ, (imagine many many Paul Engels if you can in the same area). They develope great products, but need equity motivation to work there and stay there. These are Phd, etc in very valuable fields. But a huge part of our earnings are going to these buy backs!!! And Intel could be saving millions if they are "managing" the price down as I alluded to. I don't know. I only suspect and wonder. I would love to hear from Regginold and the Assistant Prof from NC on this topic. Or if any Intel guys know, e-mail me in private. I can't remember....are these buy backs made with "earnings", or are they "pre bottom line expenses" and the earnings are still "all" there to continue to grow the company? Makes a big difference to me, and what goes to retained earnings I believe. Lee Who is the Thread Accountant, where are you?