InterDigital Inc (IDCC)

[Clarence]

Dish - Personally, I think enterprise value tends to exceed market cap (why else would so many buyouts take place above then current trading prices), but let's look at it your way. Say price per share is $25 when options are issued. Price goes to $50. The company received 125MM for 5 MM options. Pre-option shares are worth 125MM less than they would have been worth without the options. Price rises to $100 per share. $500MM in stock issued for 125MM. Shareholders "lost" $375MM in value they would have had without the options. More options, more dilution. Higher the price, the bigger the loss. Is it worth it? Actually, it may or may not be worth it, but until management tells us why they need the options we can't know. JMO.

Regards.