Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Citrix Systems (CTXS) -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (5418)	4/7/1998 6:07:00 PM
From: Biomaven	Read Replies (1) \| Respond to of 9068

Roger, <<the currently reported per share numbers are computed using about 44 million shares. Careful reading of the proxy indicates that almost all of the 60 million authorized shares are now obligated by outstanding options (about 16 million). Thus "full dilution" would require using 60 million shares in the calculation instead of 44 million. >> I'm afraid your careful reading of the proxy is quite wrong, although I'll admit the language they use is somewhat confusing. The proxy is basically referring to shares that have been _reserved_ for issuance under all the company's option plans, including one that is no longer used. In other words, it is talking about options that could legally be granted under any of the plans, not about options actually outstanding. To see what's actually outstanding and the dilutive effect, you should look at the 10-K (filed 3/31/98), not the proxy. There you will see that shares actually outstanding as of year-end are about 41.4 million. Diluted shares outstanding, which accounts for all options outstanding and in-the-money as per FAS 128, is about 43.6 million. Thus the dilutive effect of the current options at the average market price for last year is around 2 million shares. To see what was actually outstanding at year end, look at the "Options Outstanding" table near the end of the 10-K. This shows about 5.6 million outstanding of which 1.4 million are already exercisable. The reason that this doesn't increase the diluted shares by the full 5.6 million, is that these options have a weighted exercise price of around $17, and you have to account for the $93m the company would receive if the options were exercised. Because the current market price is much higher than the average for last year, the current dilutive impact of the outstanding options is higher than the 2m figure; it's probably now around 3.5m shares, making diluted shares outstanding currently around 45m, based on year-end options outstanding. It is absolutely NOT 60 million shares as you claim. Peter