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To: Boca_PETE who wrote (5195)	5/27/1998 7:26:00 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 42834

technically different. practically, however, the same. you know this. i know this. you like accounting games. i like accounting reality. different styles. different opinions. we agree to disagree.

To: Boca_PETE who wrote (5195)	5/29/1998 11:32:00 AM
From: kahunabear	Read Replies (2) \| Respond to of 42834

Pete, I believe I was the one that raised this questions many posts ago. I have read through all of the posts since then and I still think that the accounting for options is flawed. I will use your example of a company buying a stock in the open market for $50 and selling it to its employees for $10. Does the company not lose $40 on that transaction ? Does it not cost the company ? Does it not dilute the value of the shares ? You said it is added to paid-in capital. Sounds a lot more like paid-out capital to me. Whatever the case, price to book values are high. The S&P 500 is selling for 6 times its books value. I feel options and the associated buybacks that fund them, are part of the problem. I feel the so called non-recurring charges that seem to occur so frequently are also a problem. But most of all, it is a problem of too high market prices for stocks. What are your ideas on this subject ? As an accounting/finance professional do these things concern you ? The last time I checked, companies can do two things with earnings. They can pay out dividends to their shareholders or reinvest the money into the company to increase earnings and BUILD EQUITY. Well, we know they aren't paying dividends (double taxation right ?). They are putting it back to work in the company. Yet, book values have decreased, right ? If shareholders are not getting dividends and book values are decreasing, then WHERE ARE THE EARNINGS GOING ? Perhaps we would be better off buying tulips. WS