I am curious: are you arguing that the options outstanding are causing some specific dollar amount or percentage reduction in the value of RHT? Or are you saying it will cause a drop in the future, once enough investors agree with you how horrible it is?
What I am getting at is this: Everybody, including management itself (based on comments in the last conference call) agrees that the number of options outstanding is a negative. This is not a new, previously undisclosed problem. What isn't clear to me is that a) it is a big problem, since giving out no options is not a feasible alternative these days to recruiting and retaining good people, and b) that it hasn't already been discounted in the price of the stock.
Yes, it would be nice if RHT had fewer options. Yes, it would be nice if it had less debt. Yes, it would be nice if it the outplacement division were growing as fast as the consulting operation. But if it had fewer options, less debt, and faster growth, the stock might be $25 or $30. You seem to think that the mere existence of an above average number of options, despite the mandatory stock purchases required of all employees, makes management so immoral and anti-shareholder that no price of the stock is too low for it to be a good buy. Is this just purely a moral issue for you? Or, if you really are a CPA, perhaps you can quantify for us why a P/E of 7 and an enterprise value/EBITDA of 4 doesn't already more than discount any negatives. Thank you.
"You seem to think that the mere existence of an above average number of options, despite the mandatory stock purchases required of all employees, makes management so immoral and anti-shareholder that no price of the stock is too low for it to be a good buy. "
Fair enough, but I suggest you listen to the part of today's presentation and slide show in which they go over the EPS growth requirements for the awarding of bonuses and options. And don't forget the unusually shareholder friendly requirement that employees use their own money (no company loans) to purchase RHT shares in proportion to their salaries--any other stocks you own have that? I doubt it.
Net effect is, I don't believe that this company is less friendly to shareholders than average. Employees personally, not just in a ESOP, own a lot of stock and aren't trying to cheat themselves. To the extent that the number of options outstanding are too high, that is already reflected in its effect on fully diluted EPS, and amply discounted in the very low valuation.