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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (3887)	12/15/1998 11:39:00 AM
From: Elmer	Read Replies (1) \| Respond to of 4509

Agreed. But I view the options as a necessary evil that must be tolerated. It's a rip-off but all high tech firms do it, so we are stuck. Because the options (about 43 million shares worth) are worth less at today's lower prices, will that effect the fully diluted shares used in this quarters eps. I think that is the case which means the lower the stock goes, the easier it gets to meet eps expectations. Please disabuse me on this if I've got it wrong, as I'm sure you will :-) Finally, do you place any significance in the increased volume of the last two days? Regards

To: Chuzzlewit who wrote (3887)	12/15/1998 3:25:00 PM
From: RetiredNow	Read Replies (1) \| Respond to of 4509

Agreed, as well, except for one thing. Many of the companies like PSFT that pay their employees in part by giving them options also seriously underpay them in terms of salaries. For instance, some Silicon Valley firms pay salaries that are 60-70% of what they could get on the market without options. So these employees have an intense incentive to leave the company if their options become worthless. Therefore, right or wrong, these companies can't ignore the needs of their employees. If they do, they will wake up one morning and find that most of them have quit. There is too much opportunity elsewhere. I agree with you that basicly this option repricing crap is a bed that companies have made for themselves and now they have to lie in it. The real problem is that long term it does hurt investors.