Re: profits and corporate speculation
And by the way, it was Gretchen Morgenson who did the piece in Forbes a few years back on employee stock options. Louis Proyect just posted a piece by her on consumer debt. I guess she's another one of those gloom and doom loving lefties.
profits and corporate speculation
I remember reading somewhere -- maybe someone could remind me of the reference -- how companies like Microsoft and Dell were speculating on options in their own stocks and that these speculations created a significant fraction of their profits. It sounded more an extreme than the zaitech phenomenon in Japan during their boom where a good deal of profits were the result of speculative gains in holdings of other companies. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: profits and corporate speculation
Several years ago there was a spate of reporting about how employee stock option plans were essentially watering the stocks. There was an article in Forbes and one in the Wall Street Journal that I recall. Part of this had to do with the failure (much protected by the big five) of accounting standards to require a clear reserve fund to offset the anticipated cost of redeeming the options. A securities research organization in Britain ran some estimates of what the profits would like like for a number of corps if they were required to set aside a reserve -- microsoft was one example whose profits essentially disappeared with the more transparent accounting. Michael Perelman wrote, I remember reading somewhere -- maybe someone could remind me of the reference -- how companies like Microsoft and Dell were speculating on options in their own stocks and that these speculations created a significant fraction of their profits. Tom Walker (604) 947-2213
