[Am-info] Dividends

[Eric Bennett]

"John J. Urbaniak" wrote:

> Surely, Microsoft has some number of shares available for potential option
> exercises, but I am sure they don't have enough to cover all $1 options they would
> have to give out.   When they give options, they assume that most people won't
> exercise those options at once.
> 
> But if you were given a $1 MSFT option, wouldn't you be severely tempted to
> exercise that option right away and see a $50 gain?  Why would you wait?

Sometimes the options grant stipulates that the option can't be exercised
until some future date.

> Not in this case.  Issuance of new stock *dilutes* the value of the stock they
> currently hold.
> 
> This is not a "split," where the holder gets more shares at a reduced price.  This
> would be simply issuance of new stock.  The current holder gets nothing.  Thus,
> they would be very reluctant to approve such an issuance.

My impression is that shareholders almost always approve these requests. 
How often are such requests from a board (at any company, not just MS)
denied by shareholders?


-- 
Eric Bennett ( ericb@pobox.com ; http://www.pobox.com/~ericb )

We've been doubling sales every 18 months. However, when you start
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