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mas

04/19/08 11:20 AM

#61677 RE: Professor MD #61672

Wouldn't it get 3/4 of the price back due to the employees buying the options at around today's price i.e. $22 ? So it would cost it around $4bn but then your share price has gone up ;-).

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wbmw

04/19/08 12:58 PM

#61686 RE: Professor MD #61672

Re: Please note that during the first quarter of 2008 Intel distributed 132 million shares as bonuses. That is 528 million shares per year.

If you look at the 10-K, you will see that these were not new grants, but rather exercises from the current pool of existing options, which numbers about half a billion shares at the end of 2007. Please look at my posts to Joey. The sustained amount of buyback needed once the pool evaporates is about 60-80M per year, based on grants in the last 2 years.

Re: If the cost of the shares will increase to $30 Intel will have to pay 15.84 billion dollars per year.

Possibly, Intel will have to pay more if someone exercises at a higher price (if they do, it will mean higher stock price to the benefit of all of us!), but at the same time, Intel will receive positive cash flow from the employee paying the grant price of these options. All you need to do is look at the 10-K to see that the average grant price for existing options is in the high $20s. Also keep in mind that in years where the stock price is higher, stock based compensation remains constant, so the actual number of grants goes down.

Re: This is twice their “almost $7B profit in the most recent year”.

Only in the mischaracterized way that you presented the data. This is not the case long term.
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Windsock

04/19/08 4:39 PM

#61698 RE: Professor MD #61672

For the most part, Intel issues stock options on an annual basisas part of the focal review process in April. An exception is that new employees are issued stock options when they join the company. So what you see issued in the first quarter is close to the total for the year.