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

To: Richard Tsang who wrote (87034)	12/27/1998 9:27:00 AM
From: Sig	Read Replies (2) \| Respond to of 176387

Re Dell options Chuzz has discussed Dell options many time here. My own computations (very rough) showed that that Dell made about $1 Bill(which does not show up in earnings)thru the sale of puts and the purchase of calls last year. This is the present value of stock added to the treasury minus the cost, and is available to the stockholders thru stocks splits or to the employees when and if their options mature and can be exercised. Every shareholder can take advantage of options. I have many calls on Dell stock purchased at a low price, and many here like Don not only buy calls but have sold puts which have or will expire worthless. As last reported months ago, Dell has bought back 40mm shares at a price of around $28 ?? a share thru long term instruments and still had authority to buy another 100mm. So whatever benefits accrue from Dell purchasing its own stock apply both to employees to shareholders. And a great number of other companies have recently begun stock repurchase plans because they consider their stock to be undervalued. Sig

To: Richard Tsang who wrote (87034)	12/27/1998 11:42:00 AM
From: Mick Mørmøny	Respond to of 176387

Richard Tsang, relax! Dell won't shell out a penny to settle its obligations. Allow me to reprint the letter of the CFO of MSFT to The New York Times, as it appeared last Sunday, December 20, 1998, so we all can understand what is going on. I believe Dell has the same program as MSFT. --- The Purpose of Put Warrants To the Editor: Re "Financial Engineering 1.0" (Market Watch, Nov. 22), Message 6519709 which discussed how companies including Microsoft sell put warrants to outside investors: The column contained serious mistakes. First, it suggested that the proceeds from equity put warrants increase net income. It characterized the proceeds as "tax-free income" and warned investors about "jumps in income" caused by "financial engineering." This is provocative, but wrong. Under Generally Accepted Accounting Principles, companies are prohibited from including put-warrant proceeds in net income. At Microsoft, we correctly record transactions in our own stock, including put warrants, directly in the equity account. The column also implied that Microsoft's financial condition and liquidity might be strained if the put warrants were exercised. This is equally mistaken. Our put warrants have a "net share settle" option that allows the company to settle any obligation by issuing new shares, rather than paying out cash. Microsoft uses equity put warrants to reduce the cost of our stock-option and share-repurchase program. We publicly provide complete information about all of these programs and have received kudos for our disclosure. In the four years that we have sold equity put warrants, we have generated $1.1 billion of after-tax proceeds and have never had a put exercised against us. We think the program has been an enormous success. Investors and the press, of course, can make their own judgment -- it's just better to do so with facts. Greg Maffei Redmond, Wash., Dec. 10 The writer is chief financial officer of the Microsoft Corporation. --------------------- I am also including the viewpoints of nihil, one of the best minds on SI. www3.techstocks.com Regards, Beni Mick Mormony

To: Richard Tsang who wrote (87034)	12/27/1998 11:49:00 AM
From: Mohan Marette	Respond to of 176387

WOW! I see two options (1)Get a job at DELL or (2) Buy some shares.<eom>

To: Richard Tsang who wrote (87034)	12/27/1998 1:31:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Richard, you are correct in your comment about stock options being a deferred compensation (which is not included in the income statements), and that this ought to be a cause of concern for shareholders. But I disagree with your arithmetic and conclusions. First, Dell funds (and hedges) these options through the sale of puts, which similarly does not appear on the income statement. If it did, there would be considerably greater "income" than is shown (would we call this an unfunded asset?). Secondly, I think the cost basis needs to be calculated not on the difference between the exercise price and the market price, but rather on the value of the options as calculated by the Black-Scholes model. I continue to vehemently push for explicit accounting of these costs. TTFN, CTC