MICROSOFT TO REPLACE EMPLOYEE STOCK OPTIONS WITH EBAY STOCK
It's More Valuable Than Microsoft's Own Stock In the Long Run, Says Gates
Redmond, WA /DenounceNewswire/ -- 9 July 2003 -- Microsoft Corp. is overhauling its employee stock option program and instead will issue shares of eBay, Inc. to all of its employees as it acknowledges how the value and lure of its own options have plummeted in recent years. The new program, announced Tuesday, will commence in September.
"We took a long hard look at our industry, our market cap, and the road ahead," says Microsoft Chairman Bill Gates, "and after considering a long list of alternatives, we've decided that the best way to lure new employees and keep our existing employees is to offer them considerable quantities of eBay stock."
eBay, Inc., the San Jose, CA leader in online auctions, has seen its stock double in the past year, to a recent close above $114. Wall Street analysts expect eBay stock to continue to climb for at least the next twenty-five years, at which point it will be more valuable than all other companies combined.
"We're delighted and quite frankly, truly flattered at Microsoft's endorsement of our long-term value," said Meg Whitman, eBay's CEO. "This is yet another strong validation of our strategy, vision, and focus."
For years, Microsoft used stock options to attract bright young people who were not yet savvy enough to understand Microsoft's true nature. By selling their souls to the company, hundreds if not thousands of Microsoft employees became millionaires.
But since the downturn in the stock market three years ago, Microsoft shares have dropped considerably, and the exercise price of stock options is now higher than the actual price of Microsoft stock, rendering the options worthless.
"We originally got the idea to give eBay stock to our employees after we noticed the huge number of employees selling their worthless option certificates on eBay," says Gates. "After speaking with the employees, we learned how much they respected and valued eBay, so one thing led to another and today we're announcing this program."
Whether or not Microsoft will acquire eBay, currently worth over $36 billion, is not known. Microsoft could buy eBay for cash and still have over $10 billion in reserves, Wall Street analysts pointed out.
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