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To: Ian@SI who wrote (30516)	5/22/1999 1:22:00 PM
From: Gottfried	Respond to of 70976

Ian, thanks for the summary of Dell stock purchases. G. [end]

To: Ian@SI who wrote (30516)	5/22/1999 4:29:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Ian, To reduce the cost of shares bought back, it both sells Puts and buys calls. Given the rate at which the share price has rocketed, this has been an extraordinarily successful strategy. Although DELL is the focus of the article, let's not forget that INTC and MSFT have used the same stategy with great success(ie. billions pocketed). BK

To: Ian@SI who wrote (30516)	5/24/1999 12:33:00 AM
From: Sun Tzu	Read Replies (1) \| Respond to of 70976

You are correct in describing DELL's strategy (a.k.a. synthetic buy back) and the article was certainly wrong if it said that the proceeds from derivative transactions made it directly into the earnings. However, by reducing the number of outstanding shares, these transactions did raise the reported EPS, the magnitude of which is unknown to me without studying the numbers. BTW, last Fall I wrote a piece in which I described the strategy and how some company's were having their head handed to them since their calls were worthless and the puts were in the money. Lucky for them, the market recovered rapidly. ST