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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Maxwell who wrote (32402)	5/4/1998 1:13:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 1571931

Maxwell - Re: " If shareholders are their #1 priority then all the executives shouldn't be given million of shares of options." If you look at the past 10 or 12 months and draw a conclusion regarding Intel's management's concern for shareholders you might reach one conclusion that may be a great mistake. Intel has taken several actions regarding pricing on its CPUs due to AMD's entry with their K6. What Intel did, by cutting pricing, was to play AMD's game and reverse the tables. AMD has a history of second sourcing (re: COPYING) successful products and BOMBING prices to get market share. Intel dropped CPU prices faster than AMD expected, wiping out ALL HOPE of profits. AMD's own incompetency stretched that problem into a string of losses. So, Intel shed some blood in the short term. Their stock reflects that. What is now important is the Long Term. AMD is severely wounded and financially "shaky" at best. In the mean time, Intel's technology has increased in capability and every day they are one day closer to a more dominant position as their new products, with excellent performance, create high profits and they fend off AMD at the low end with the Celeron chip. This "end game" will insure low prices for AMD - preventing them from gaining significant market share and certainly minimizing all hopes for profitability. As time progresses, Intel will stretch their technology, manufacturing and marketing advantages over AMD and move into a "protected" playing field - which will stabilize ASPs, increase profits margins and return Intel to a higher growth mode. Look at Intel's long term charts - stock price, revenue, profits, etc. It is a consistent story - and reflects the true contribution of Intel's management to shareholder value. Paul

To: Maxwell who wrote (32402)	5/4/1998 4:33:00 PM
From: Larry Loeb	Read Replies (1) \| Respond to of 1571931

Maxwell, in regard to If shareholders are their #1 priority then all the executives shouldn't be given million of shares of options. I disagree with this statement for two reasons: 1. By making employees and managers shareholders, the interests of these employees and managers are aligned with those of the shareholders. It is normal for some of these shares to be sold, for tax and cash flow reasons. It is important, however, for employees to continue to hold these shares. 2. In the technology field, these days, stock options are required in order to attract the best talent. This is what the job market has brought to the industry. It only becomes a problem when the companies underperform and the options must be repriced. This hurts the shareholders with dilution, but may be necessary to retain or attract top talent. Larry