Hype Over Options Expenses On The Way
from the is-this-really-a-big-deal? dept
We've discussed in the past how the whole debate over expensing options is really much ado about nothing. It's purely an accounting issue, that has almost no real impact on actual cash. Yet, that doesn't make for an interesting news story, and Marketwatch has a story about how the tech world is "bracing" for the impact of having to expense options. Of course, while the article starts out with some scary sounding numbers concerning a few companies' income statements, the rest of the article makes it pretty clear that the impact should be minimal -- as it still doesn't change anything real. It doesn't change how much cash a company has, unless that company decides to go out and buy back shares to prevent dilution (as some firms are doing). However, any serious investor has already taken into account the new rules, and it's unlikely to cause much concern. There will likely be some headlines about a few companies who will go from a profit to a loss over this, but it's all on paper. It remains a story for the press to make a big deal out of, but which should have little real impact on most companies.
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It cuts down on laundering.
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You'r Looking Only at the Shareholders
Surveys are estimating that some 60% of companies are cutting back on options, and those that are cutting back, about half are cutting options only to the lower ranks (i.e. not everyone, just the little guy). Of course nothing is changing for the upper ranks, so all this rule did was take away a perk from the rank-and-file.
So no big deal? If you are an upper manager, I guess so.
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Re: You'r Looking Only at the Shareholders
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Options Expensing
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Re: Options Expensing
If anything, it seems that the the retail investors simply follow the analysts these days, and the analysts should know better. Just look at how Intel/Yahoo stocks moved after their calls today. It wasn't about a bad quarter, but about analysts worries... leading to lots of people selling. It's the difference in real results from analyst expectations that were the problem -- and you can see how people follow analysts in the resulting panic.
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Re: Options Expensing
Oh, I don't know, I make a lot of money doing that. See my blog for when I started calling out GOOG.
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