Financial News

[southsider2k5]

It sounds like such a big number. The reality is that the real cost to the company is $3 million +. The stock options don't actually cost them anything.

[Chisoxfn]

It sounds like such a big number. The reality is that the real cost to the company is $3 million +. The stock options don't actually cost them anything.

Those are all real financial statement expenses which ultimately impact the company and thus the shareholders. Those are accelerated options that she is granted, real money. She could choose to exit at that point and sell everything and get paid (depending on what the estimated $52M valuation was). That isn't some funny number. It is just as much the equivalent of cash and is something that absolutely will impact the financial statements of yahoo, reduce equity, etc.

 

[Jenksismyhero]

Those are all real financial statement expenses which ultimately impact the company and thus the shareholders. Those are accelerated options that she is granted, real money. She could choose to exit at that point and sell everything and get paid (depending on what the estimated $52M valuation was). That isn't some funny number. It is just as much the equivalent of cash and is something that absolutely will impact the financial statements of yahoo, reduce equity, etc.

 

To who though? Is there are a requirement that Yahoo has to buy them back? Or is she selling them on the open market?

[Chisoxfn]

To who though? Is there are a requirement that Yahoo has to buy them back? Or is she selling them on the open market?

She'd sell them on the open market. In this case, if the company had a change of ownership, all of the options would be expensed at her books and she can do what she'd like with them. I don't know how the $50+M figure was calculated and clearly if the stock was in the tubes at the time and that value is based upon a current valuation, than the real world equation vs. actual cost could differ. What goes into the calcs and models to get to the value and expense figure is more complex but there is a real cost to that.

 

[Jenksismyhero]

She'd sell them on the open market. In this case, if the company had a change of ownership, all of the options would be expensed at her books and she can do what she'd like with them. I don't know how the $50+M figure was calculated and clearly if the stock was in the tubes at the time and that value is based upon a current valuation, than the real world equation vs. actual cost could differ. What goes into the calcs and models to get to the value and expense figure is more complex but there is a real cost to that.

 

End of the day though Yahoo! isn't paying her 52 million for those shares. They gave her some paper that has value to others. I guess you could say they gave away more of the company in stock to her and thus lost some value by having to issue more stock, but it's still not the equivalent of cash to her for the value of the stock.

[StrangeSox]

Well gee if it doesn't cost yahoo anything maybe they could throw a few million in shares and options my way? Or give this to every one of their employees?

[southsider2k5]

Well gee if it doesn't cost yahoo anything maybe they could throw a few million in shares and options my way? Or give this to every one of their employees?

 

Being a dot com company, I would bet they have a fairly impressive options plan for their employees.

[Chisoxfn]

End of the day though Yahoo! isn't paying her 52 million for those shares. They gave her some paper that has value to others. I guess you could say they gave away more of the company in stock to her and thus lost some value by having to issue more stock, but it's still not the equivalent of cash to her for the value of the stock.

They will have a $52M charge go through their income statement. $52M will go through their income statement as compensation expense (the value of what they are paying here). It is REAL EQUITY that they are paying out. In what world is equity not a value. Yes, the actual worth of that "equity" could differ, but it is real value. If it weren't. She can choose what she wants to do with it and I've pointed out a few times I don't know what value Yahoo is quoting and I'm not going to take the time to run a black scholes on the calculation but this isn't fake money to Yahoo's financial statements. Yes, it is not actual cash, but instead it is real equity of a company you are giving away.

 

Just like you could give away real equity of a house if you gave up an ownership stake to others and thus diluted your stake. This is not a freebye granted by Yahoo that has no bearing on their financial success, it absolutely has a bearing on its actual financials, P&L, etc. This is equity that they could have used to generate capital vs. give to an employee.

 

And every stock company will have various option programs for various levels of employees, it isn't like yahoo is a start-up (usually it is the start-ups that have far more lucrative options and to the extent, in these cases, companies leverage future worth and potential reward to attrack talent when their are very much unknowns...boom / bust potential and an inability to compensate accordingly for any other way). In the case of yahoo, they are a more than established company and she could easily turn around and immediately divest if that is what she wanted to do (and I don't know her intentions). There was a real economic opportunity cost to this decision. This is not just accounting mumbojumbo.

[StrangeSox]

Being a dot com company, I would bet they have a fairly impressive options plan for their employees.

Maybe 25 years ago, isn't "we'll pay you in equity!" more of a startup thing? Either way I guarantee they are not giving each of their employees tens of millions in stock options when they are fired.

 

Eta beaten by Jason who is obviously much more knowledgeable than I am!

Edited May 2, 2016 by StrangeSox

[southsider2k5]

Maybe 25 years ago, isn't "we'll pay you in equity!" more of a startup thing? Either way I guarantee they are not giving each of their employees tens of millions in stock options when they are fired.

 

Eta beaten by Jason who is obviously much more knowledgeable than I am!

 

10's of millions? No, of course not. It is very different to give stock to one person, versus thousands. You also have to keep in mind that this didn't happen in a vaccuum. What the left wing is leaving out in their reporting is that Meyer was a very early google employee, and had a ton of money wrapped up in options for them. In order to lure her to leave that, they had to pay up, much like trying to get a free agent to leave for a town other than their home.

[StrangeSox]

10's of millions? No, of course not. It is very different to give stock to one person, versus thousands. You also have to keep in mind that this didn't happen in a vaccuum. What the left wing is leaving out in their reporting is that Meyer was a very early google employee, and had a ton of money wrapped up in options for them. In order to lure her to leave that, they had to pay up, much like trying to get a free agent to leave for a town other than their home.

 

 

Noted commie rag the USA Today...

 

They are paying their ceo enormous sums of money to be the latest in a string of people riding the company into the ground. She hasn't been very good at this job, so luring her away with dump trucks of money wasn't actually a good idea. CEO pay in this country is ridiculous and this is just another example of how it gets to this point.

 

 

 

 

[southsider2k5]

Noted commie rag the USA Today...

 

They are paying their ceo enormous sums of money to be the latest in a string of people riding the company into the ground. She hasn't been very good at this job, so luring her away with dump trucks of money wasn't actually a good idea. CEO pay in this country is ridiculous and this is just another example of how it gets to this point.

 

Thanks to SOX for fixing that with CEO pay disclosure.

[StrangeSox]

Thanks to SOX for fixing that with CEO pay disclosure.

That was happening before that, but the trend has accelerated in the last couple of decades I think. This is sort of along the lines of what I was driving at a couple of weeks ago about boards. At these big companies, they can be very incestuous in nature. You also have a messed up incentive structure where you need to make sure you're paying well for the best talent to send a strong message even if it turns out that the correlation between executive pay and performance is weak if not negative.

[StrangeSox]

Sports Authority is going under

 

Sports Authority is "pursuing a sale of some or all of the business," said a statement from the company. "We have received initial expressions of interest from a number of potential buyers, and we are optimistic about the results of the [sale] process. The outcome of the...process will determine whether any additional store closings will be required."

 

But experts say it's now likely that the large majority, if not all, of the chain's stores will go away in relatively short order.

 

"It's a well-known brand. It's on the top of stadiums. But it's safe to say there's a tarnish on the brand now," said Larry Perkins of SierraConstellation Partners, an expert in retail reorganizations.

 

When the company was bought by a hedge fund 10 years ago, it was the nation's largest sporting goods retailer. But it has struggled with the debt load associated with a leveraged buyout.

 

 

[bmags]

I feel like sports box stores could be a lot cooler than they are. There's an old dept store prejudice now, you walk in them and are just like "yuck this is dying". Vs. look at Menards remodeling and walking in. You can't just put a bunch of s*** on racks now and call it a day.

[StrangeSox]

I can't say I've noticed Menards remodeling? The stores in Bolingbrook, Homer Glen and Crest Hill or Romeoville are all laid out identically and the CH/R store is pretty new.

 

Sports Authorities/Dick's etc could try to mimick something like Bass Pro but on a smaller scale instead of just being a big box.

[Y2HH]

I can't say I've noticed Menards remodeling? The stores in Bolingbrook, Homer Glen and Crest Hill or Romeoville are all laid out identically and the CH/R store is pretty new.

 

Sports Authorities/Dick's etc could try to mimick something like Bass Pro but on a smaller scale instead of just being a big box.

 

Me either.

 

And I think Bass Pro is buying Cabelas, so good luck with sports authority and dicks trying to compete.

[bmags]

I can't say I've noticed Menards remodeling? The stores in Bolingbrook, Homer Glen and Crest Hill or Romeoville are all laid out identically and the CH/R store is pretty new.

 

Sports Authorities/Dick's etc could try to mimick something like Bass Pro but on a smaller scale instead of just being a big box.

Oh man, we just had a new menards open up on North ave way down in like...melrose park or something. It's a farther drive but has the best lumber yard I've seen. We drive there 15 minutes farther than Lowes/HD.. The one in cicero was updated as well.

 

[lostfan]

I'm going to suspend Y2HH because I think he misses me.

[bmags]

Can we talk more about Menards?!?!

[StrangeSox]

Menards lumber selection is pretty awesome, but the quality of a lot of their other stuff is a step below HD or Lowers. Tools comparable to Harbor Freight etc.

[cabiness42]

Can we talk more about Menards?!?!

 

New one opened 2 miles from my house last Fall.

[bmags]

Menards lumber selection is pretty awesome, but the quality of a lot of their other stuff is a step below HD or Lowers. Tools comparable to Harbor Freight etc.

 

I just whispered aloud "that's true"

[StrangeSox]

I have no idea how people aren't routinely maimed or killed by their forklift drivers. They fly around with no spotters especially through the garden center. Compare that to HD who will shut down an entire aisle.

 

They also take part in some pretty dangerous activities for themselves:

 

 

"I need the lift to get some beams down"

"Hey, there's a bunch of 2x's stacked on the fork lift, let me set those down first"

"Nah, I'll just hop on top"

 

this was the day that the winds were blowing like 40 MPH back in early April.

[bmags]

That commitment to doing their job on time is my favorite part. I need some lumber, HD, not a safety lesson!