John O

Google: Extraordinary Growth, But The Stock's Still Expensive

Henry:

Google estimated that the "Fair Value" of the expense of employee and executive stock options to be $621,000,000 for the year 2007. This is prior to their introduction of the new transferable options program for 6.6 million options. The additioal expense for the transferable feature is estimated by Google to be $90,000,000 for the first quarter of 2007 and another $160,000,000 for granted options vesting after the first quarter of 2007.

These figures do not include the "Fair Value" expenses of future granted options which will include expenses associated with the grant of higher valued options.

As I am sure you know, the "Fair Value" that is expensed wil be far less in the case of Google than their actual options expense, given the dramatic increase in the stock's value.

What is your view of how all of these new options expenses will impact earnings and the market value of the stock?

Johnny Options