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

To: rudedog who wrote (114163)	4/4/1999 3:04:00 PM
From: Lockeon	Read Replies (1) \| Respond to of 176387

Chuzz, Rudedog, I am a bit hesitant in putting forth this information since it has been gleaned through perusing reports and articles over the past 6 months (and I do not have the articles and reports url handy), ever since I became interested in how precisely Dell funds and executes its Share Buyback program. Here is what I have gathered FWIW going purely from memory. Ever since 1992-1993 when a derivatives disaster occurred (based in part due to the share price falling 50-75%), Dell has been extremely conservative in its derivatives strategies. Meredith, if you recall was brought in, in Nov. 1992 and one of his primary tasks was to limit the risks - as a matter of fact "In September 1998 CFO Magazine and Arthur Andersen named Mr. Meredith as the CFO Excellence award winner for Risk Management and Performance Measurement." dell.com The technical way that Dell buys back its shares is as follows. Dell sells puts and buys calls with the proceeds through private placement, for a net cost of zero - essentially the same procedure that edamo uses, except that Dell does not go long with the common - he is probably better at explaining this stuff than I. The price points used are the key, from what I understand, to risk management. However, according to a couple of reports that I read, the average cost of the share buy back last year was 14.25 (I think this is split adjusted but am not absolutely certain). This seems to indicate that an extremely conservative approach is used. The options granted to employees are funded through the share buybacks that Dell employs. The options granted, however, use up only part of the share buy backs, as is evident from the decreasing number of total outstanding shares through the years. As far as ESOPs providing a benefit that is undifferentiated on performance, I tend to believe it to be otherwise (note that Meredith was awarded the prize for risk management AND "Performance Measurement"). Perhaps the two of you can expand on this a bit more...(BTW Chuzz, am thankful that you were not suspended for long as I have long respected your opinions). Regards to both of you...... Have a GREAT day.....

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