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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: JGoren who wrote (58303)	12/26/1998 1:43:00 PM
From: Bindusagar Reddy	Respond to of 61433

That is an excellent point. If Mory needs 2 million dollars of cash, he has to sell the stock to first to pay the taxes which is almost 54%, from what I understand, when they exercise the options, even if they don't sell, they have to pay income taxes at maximum rate just like EARNED INCOME not long term capital gains. If you sell 4 milion dollars of stock. You pay the company the exercise price and you pay 39.6% federal tax + 3% medicare tax + 11% california tax. That adds up to 54%. You are left with less than 2 million. TOTAL TAX BITE OF MORE THAN 2 MILLION, UNCLE SAM GETS RICH FASTER THAN THESE GUYS. Another point I noted was whenever they exercise options they immediately sell. They simply can not exercise and keep the shares, just because of the tax liability. That explains why Mory doesnot own shares. He does have over 1 million exercisable options (why exercise, when they are growing tax free, just do it when you need money) over the next several years. You have to think of it as their salary. The reason so many in one month. They were restricted in previous 3 months. THERE WERE NO INSIDER SELLINGS IN DECEMBER. I take the action of ASND moving up over 10 points since NOvember despite massive insider sellings as POSITIVE not negative. It is based on monthly improvemnt of FUNDAMENTALS. ASND is in a dynamic and explosive field of building the next generation multimedia networks. Even insiders can get surprised with developments. Guys, don't make too much of these insider sellings. BR