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Microcap & Penny Stocks : INCE - Intercell info??? -- Ignore unavailable to you. Want to Upgrade?

To: Joseph F. Trombetta who wrote (2462)	12/16/1997 5:44:00 PM
From: Lee Bush	Read Replies (1) \| Respond to of 3358

Joey: Kind of a coincidence, but I e-mailed bill some figures on MSFT just today. What do you think MSFT made last year? Well, their June report says that they made $3.4 billion. But, did they really make that amount? They issued options for 47 million shares to their employees in lieu of higher salaries. The conversions prices were much below the $140./sh price, so these shares rapidly end up in the market. The company, not wishing to see their stock price decline, promptly bought 37 million of those shares back off the market at a price of 2 billion. So, they really only earned 1 billion. But if they had bought back all 47 million shares, they would have no earnings at all! How much would you pay for a company that had zero earnings? $140/share? I think not. What I am getting to is that there is a flaw in the market system at present. That flaw is the ability of company management to issue stock options far below market prices with no regard to stockholders. This problem is endemic in the 1990's market and may come to the fore some day with disasterous results. In the WSJ, Roger Lowenstein wrote an article entitled "Microsoft and Its Two Constituencies". Interesting reading. Closer to home, certain small companies also have learned to play the options game. Sometimes these companies price their options too high and have to 'lower' them appropriately. Of course .50 options are still not in the money if a stock is selling for .16. But, when it does rise to .50, what happens then? You guessed it. Form 144 time. Lee