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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: ToySoldier who wrote (8997)	7/6/1998 9:21:00 PM
From: NickSE	Respond to of 74651

Anyone have an opinion on this article from Business Week? Now I know why Gates is trying to talk down the stock. Do CFO's Have Too Many Options? For Personal Use Only The booming stock market is good news, but it's bringing a new kind of stress to the job of CFO. Consider the plight of Microsoft's CFO Gregory B. Maffei. Twenty-one thousand of the comnpany's 24,000 employees now hold stock options. Microsoft's commitment to options for all has been widely praised. "Microsoft cares a lot about our ability to employ and retain people," says Maffei, "but this is turning into a dangerous situation. It would eat up a full year's earnings to cover our annual options exposure. Our total options overhang is downright scary: five hundred million options outstanding with a current market price of roughly $90, and an average exercise price of about $20. That is $35 billion of in-the-money value. It is a real concern over time, no question." Others outside of Microsoft share the same concern. One of the nation's most successful portfolio managers, Howard F. Ward of The Gabelli Growth Fund told the CFOs, "I for one am still trying to understand what's going to happen to the liabliity that Microsoft faces when their option runs out of steam. If anybody has that figured out," said Ward, "I'd like to know." Copyright 1998 The McGraw-Hill Co.