From enrique at anise.ee.cornell.edu Fri Mar 10 12:00:27 2000
There is a good reason why no tech companies, not even
mature, nominally profitable ones, pay significant dividends
- they just don't have the free cash flow.
Tell that to Microsoft ($17.8B), Intel ($11.5B), Cisco ($4B) ...
If stock options were expensed using, say, the Black Scholes
model, the NASDAQ would collectively report an enormous
loss, year after year.
That's a silly proposition: if they were expensed, they wouldn't be so plentiful. That's like saying "If Bill Gates sold all his MSFT stock, MSFT would trade down to $1" ...
It's just bad math/logic.
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I think it's more useful to see stock options as an outsourcing of compensation to the company's shareholders directly rather than washing it through the annual report :-)
/jordan