diet coke for breakfast

Friday, January 02, 2004

Posted by Tanstaafl
Let's trump up a scandal because his last name is Bush:

Unlike the ordinary investor who buys at the market price, however, Bush benefited from the fact that his stock purchase costs in some cases were minimal because he got a bargain, paying $13 a share when he exercised stock options that were part of his consulting compensation from Kopin. The company's stock price was selling for many times that amount during much of the time Bush was trading. The company granted him 20,000 stock options.

It's like they're trying to suggest that somehow stock options are unethical. "Unlike the ordinary investor"?!?!? First of all, ANYONE WHO WANTS TO CAN PURCHASE STOCK OPTIONS FOR A SMALL PREMIUM. Second, often small tech based pay employees and consultants with stock options, because they don't have cash flow to be be paying them wages. It doesn't say that his options were well below the stock price when they were granted, it says they were below the price when he was trading. THAT'S THE POINT OF A STOCK OPTION. It's the right to buy the stock later on at a given price. It's a bet that the stock will rise above that price, and that you will make a profit. The WSJ published an article about a deal the company made, the stock started rising, and Mr. Bush's financial advisor said, excercise your options. EVEN IF HE KNEW ABOUT THE DEAL AHEAD OF TIME, he didn't exercise his options or sell his stock until it was public knowledge. Insider knowledge is only illegal if you trade on it BEFORE IT BECOMES PUBLIC. Otherwise, executives could NEVER buy or sell stock in their own companies. I'm sorry, but this is a non-issue.


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