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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: LemurHouse who wrote (52084)	7/18/1998 7:22:00 AM
From: HoyaBob	Read Replies (1) \| Respond to of 176387

I recall a recent Forbes article on options in which Dell has an extremely high percentage of options available to employees. The gist of the Forbes article is that the options craze (options in lieu of salary, incentives, etc.) is seriously diluting shareholder value. Any concerns? I'm so new to Dell ownership that I haven't voted on any options plans as yet, but I intend to. The buy-backs may be related to these internal compensation plans. If their purpose is to compensate employees while maintaining the value of stock price to public, I guess I could see the point.

To: LemurHouse who wrote (52084)	7/18/1998 7:24:00 AM
From: JPR	Respond to of 176387

Andrew: SPLIT...Nice psychologically, and perhaps increases the investing pool, but does not directly appreciate your money. Many times a split announcement precipitates a rapid rise in the price and value of the stock in the sense that the company has confidence in going forward. In that sense, I would consider a split as a value adder to the stock holders and the company. JPR

To: LemurHouse who wrote (52084)	7/18/1998 7:49:00 AM
From: Geoff Nunn	Respond to of 176387

Andrew, thanks for the nice post. As you suggested, stock splits and share buybacks are completely unrelated issues. A firm doesn't have to split the stock in order to do a stock buyback. In deciding whether share buybacks benefit the investor, dragging in the issue of stock splits merely confuses the issue. Let me quibble with one thing you wrote: Buybacks are different. If the company buys back the stock and retires it, then each remaining share represents a proportionally bigger piece of the company, and is therefore more valuable It's true that each remaining share represents a larger proportion of the company, but don't forget the company is worth less after it disgorges cash. Each remaining share is a larger slice of a smaller pie. Therefore, it doesn't follow that each remaining share will be worth more. In practice though, share buybacks do seem to benefit investors. Perhaps its because the market perceives the cash that was given up as a drag on EPS. Also, a stock buyback is a signal that management may perceive the stock to be underpriced. On the issue of buyback shares being used to fulfill management options contracts, in the case of Dell some are used for that purpose but not all. While I don't have the figures, I do know that the total number of Dell shares outstanding (split adjusted) has been steadily shrinking in the past few years. Anyway, given Dell's performance what are you complaining about? Geoff