The so-called "dilution" comes from authorized but unissued shares or shares held in the Company’s treasury. The shares are reserved, exclusively, for use as employee compensation. The fact that such shares are regularly issued is something Wall Street has known since at least 2005, when the compensation plan was described in detail in the 2005 Stock Incentive Plan, filed with the SEC and recently amended and restated in the 8-K filed on March 11th -- more than two months ago.
Being the most intellectually dishonest poster one is ever likely to find, jeffchace will of course continue to crow ignorantly and disingenuously about this "dilution" ... which is, in fact, a balance-sheet transaction: it reduces future SGA, etc., by $1.14 billion by issuing $1.14 billion worth of stock to accomplished and faithful employees. The bottom-line book value per share remains exactly the same, because the $1.14 billion book value saved in compensation is offset by the $1.14 billion in shares lost. So: book value per share is exactly the same.
Before accepting jeffchace's RELENTLESS LIES AND DISTORTIONS, you should read the 8-K filed on March 11th in conjunction with the S-8 filed today. But even without gong that far, you can realize that jeffchace is lying merely by looking at his claim that this so-called "dilution" will reduce EPS by 4 cents: you could say the same thing about any company that pays salaries to employees -- every company, in other words -- in that the salaries "reduce" EPS. This is exactly the same thing.
Your post belongs under the topic titled, "Where are the shills to spin this 33 million share dump?" 20-May-08 05:21 pm
The effect of the free shares is that Disnay bagholders continue to get screwed.
Worst of all, Disney has an insuperable problem: $16 billion debt, $5 billion accounts payable, $2 billion taxes, and only $3.86 billion cash.
How will Disnay pay its debt? Will it sell assets? or Will it continue to issue more shares?
Disnay has the sleaziest insiders dumping free shares, intense competition in movies (Iron Man, Sex and the City, Indiana Jones), amusement parks (Universal's Krustyland and the beach which is free), and tv (FOX, NBC, CBS, Internet), and off balance sheet issue posted this morning.
Dividend is not in play until 2009, and walle, the last possible catalyst for Disnay, is like a two dollar whore hoping to hit it big on scratch off lottery tickets. So, exnay on the Disnay.
you better take some accounting courses before you try to sound as if you no something about disney's books that wall street doesn't. all you have to do is read an annual report and you would have seen the 33 mill. share issue. it is part of a plan that started in 2004. as for the debt disney is conservatively leveraged for the cash and growth rate they possess. at this stage they have the cash to do pretty much what they think will make them a good roi.