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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (55480)	4/10/1999 2:29:00 PM
From: Bill F.	Read Replies (1) \| Respond to of 132070

mb-judging from some time spent with the crowd on the cpq thread,earl the pearl has finally lost his credibility.something he ahs been actively pursuing for 2 plus years now(BG).some denial but i think more realization that they have been had by cpq .company specific spin doctors will be out by monday but after intc ,(given all that has already happened) reliaty may dawn.a scary thought(BG).

To: Knighty Tin who wrote (55480)	4/12/1999 10:01:00 AM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Mike, >>The best part of the issue is when Smithers claims that the phony accounting for employee stock options inflated eps by 56% in 1997 and 50% in 1998. I must have lost my new pair of dimes. That sounds like a lot to me. <g> Nothing new to readers of this thread, but still nice to see in print given the circulation of the rag.<< The way he calculates the cost of the stock options is to see what the ultimate cost of repurchase is based on the market price of the stock. In other words, when MSFT grants a pile of options they use Black Scholes to estimate their value. The adjusted EPS is in the footnotes. If MSFT stock doubles in about 5 minutes (which it usually does <g>) the cost of repurchasing the exercised shares down the line far outstrips the originally estimated value of the options. It is that repurchase cost (adjusted for time I think) that gets him to the numbers he is quoting. He also estimates the cost of immunization. That is, if the company bought calls to protect itself from a runaway bull market and the costs associated with repurchases. I am not sure I agree with his methodology completely because a bear market would reverse these costs to some degree, but the numbers are staggering no matter. Wayne