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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Sonny Blue who wrote (26668)	5/29/1999 5:36:00 PM
From: Eugene G. Glover	Respond to of 50167

Sonny, My original reason for looking into Dell's option trading was because if it was booked as earnings, thereby inflating computer sales earnings, it would inflate the stock price on the way up. During a period of stock price consolidation, however, it would work against them. If the options strategy no longer was working they wouldn't be able to boost earnings and quarterly results would soon produce some negative earnings surprises. The way they are handling the options trading, however, is to simply adjust the price of shares they buy back which affects net worth but not the income statement. If this is the case then there is no disadvantage to them if they can't continue the options strategy and what they have done is not only profitable but great for shareholders because they reduce the stock outstanding. Now I think it was a brilliant maneuver. GENE