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: Al Chechatka who wrote (5434)	4/8/1998 9:20:00 AM
From: Roger A. Babb	Read Replies (1) \| Respond to of 9068

Al, the options will always be exercised, it is riskless for the holders because of the repricing option. In effect the options end up being priced at the lowest stock price of the year. If you read the 10k you will see that CTXS repriced the management options at the bottom of the big dip last year. While long shareholders were looking at big losses, management created a windfall for themselves, the big dip was actually a big benefit for the option holders. It is my opinion that option holders should have the same risks as shareholders. (Wouldn't it have been nice if the shareholders could have reduced their purchase price during the dip.) Repricing options should not be allowed, it actually gives management incentive to create stock price volatility. I am also of the opinion that all option plans should be subject to shareholder approval to prevent such abuses. Note that the proxy allows management to issue up to 90 million more options in unspecified plans without further shareholder approval. I would not be long a company that has abandoned such fundamental shareholder rights. The current 1995 plan results in new options each year in the range of 5 or more of outstanding shares. This "share inflation rate" must be deducted from the revenue growth rate to find the true growth rate that flows through to shareholders. It is obvious from the discussion on this thread that there are varying points of view and misunderstandings on this subject. I would urge readers to not accept the opinions of either side of the discussion but rather to carefully read the proxy and the 10k, then make your own judgements as to its meaning. If in doubt about the meaning of the wording, call CTXS and ask for an explanation. Afterall, it is your money at stake.