Intel Corp (INTC)

[Elmer Phud]

Dew -

Elmer: an increase in the share count due to option exercises does not affect absolute shareholders’ equity (a.k.a. net worth, a.k.a. book value), but share expansion obviously does affect shareholders’ equity per share (a.k.a. book value per share).

I am no expert here so don't think I'm pretending to be, but it seems to me that equity per share suffers only to the extent that the per share equity exceeds the exercise price of the option. If per share equity is $10 and a company has options exercised at $10 a share then it is a push.

So how do we calculate per share equity? Is it book value? If it is then Yahoo says Intel's book value is $5.39 so any option exercised above that price actually raises the equity per share. Intel's website says the total shareholders equity is about $35 billion with about 6.5 billion shares outstanding, again pretty much agreeing with book value.

Again I am no expert here but how would selling shares at $10 apiece lower shareholder equity unless you point out that they could have sold them for more on the open market?