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

To: David S. who wrote (48164)	2/19/1998 4:48:00 PM
From: Longshot	Respond to of 186894

Ok. So far it seems exercising the warrants resets the holding period, which is ok for us future long term holders. Thus, we defer taxes for the current exercise and regain better tax rates by going long term again. Now my question is this: for us California people, are there AMT tax implications for exercising the warrants as there are for exercising options (such as employer given stock options)? I've not been able to get a clear answer to this question... Any responses appreciated. Thanks. -Erick

To: David S. who wrote (48164)	2/19/1998 8:45:00 PM
From: Barry A. Watzman	Respond to of 186894

With regard to the warrants, Intel has been treating them as if all of them will be converted for some time, and the EPS numbers also have included the warrants outstanding in the divisor for some time (making the earnings "fully diluted"). This was required because the warrants are so deep in the money that no other presumption is reasonable. I'm not so sure that all of them will be converted "in the next few days", although obviously it will be done by March 13th (for conversion, you have until the 13th, but only to March 10th for sale). The way the stock is running up, it may pay to hold them for another two weeks. I have an IRA account with 100% INTC warrants (MANY warrants) and no cash or other securities. I will either sell all outright, or sell some to get cash for converting the rest. Another ten points or so will make a difference of several hundred shares in how many shares of stock I have in my account once the warrants are all sold/converted and the dust has settled. I had no plans to wait this long, but I also didn't expect one of Intel's classic "Warp 10" moves to occur just before the expiration date. I've been 100% invested in Intel since 1993, and it would be great to have the warrants be at their all-time high just at the end, when I had to make the paper gain real.