Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : IATV-ACTV Digital Convergence Software-HyperTV -- Ignore unavailable to you. Want to Upgrade?

To: StaggerLee who wrote (3772)	5/17/1999 11:51:00 PM
From: art slott	Respond to of 13157

Where is your proof lee! You are making wild accusations based on your belief that management is out to ROB us. Read what it says, its right there in black and white. They are going to be paid in stock for the SARs based on a price 3 15/16. Show me your proof Mr. shorty lee. >>There's no mercy and benevolence here! These executive officers agreed to limit their compensation and the corresponding liability to the Company related to all of their vested stock appreciation rights based on a common stock price of $3-15/16, and further agreed to be paid in unregistered common stock in lieu of cash for all of their vested SARs. I don't think means they're settling for $3 15/16 instead of $15. It only means that they signed an ageement opting out of the Plan, which legally lets the corporation off <<

To: StaggerLee who wrote (3772)	5/17/1999 11:57:00 PM
From: Mike Fredericks	Respond to of 13157

Stagger- Check out the very bottom of my last post... management taking their compensation in stock rather than cash makes a HUGE difference in the bottom line, because they get the stock at the high end-of-quarter price, not the old price. They still get beaucoup $$, but it should affect the bottom line differently. For example, assume that the quarter ends with a stock price of 20. Assume also that that capping thing was only a 1-quarter deal, that they will go back to receiving full 2% of market cap increase as a bonus (which is the "worst case" in my book.) 20 - 11 1/4 = 9.75 * 37MM shares (latest figure in 10Q) = $360MM market cap increase. 2% of that is $7.2MM. If they took the 7.2MM in cash, it would reduce earnings by 7.2MM/37MM = ($0.195) per share. Ouch. If they took the 7.2MM in stock, it would translate into 7.2MM/20 = 360,000 shares of stock. That's less than a 1% dilution. So it dilutes any earnings by 1%. Big deal. This is (almost) nothing. A fraction of a penny unless our earnings are greater than $1.00/share. Unless earnings are greater than $19.50/share, we're better off giving up 1% of earnings than giving up the 7.2MM in cash. And if we make $19.50/share in earnings this quarter, even with a P/E of 20 the stock would shoot straight up to $390 when the numbers were released, and neither you nor I would really give a darn about executive compensation because they would have earned every penny. The only question I have is, when they accept their bonus in stock rather than cash, how does that go into the earnings equation? I'm hoping the company still doesn't take a multi-million dollar charge, but to me it wouldn't make any sense to take that charge because the issuance of the new stock doesn't cost the company anything other than dilution... but I'm sure that there is an accountant out there who knows the answer for certain... Also, what's the difference between "registered" and "unregistered" stock? Thanks, -Mike