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51% Eligible Employees Participated in SOTP

Contributed by mm | December 11, 2003 12:55 PM PST



Microsoft today announced that "51% of its eligible employees participated in a stock option exchange program with investment bank J.P. Morgan Chase & Co., tendering 345 million of their underwater stock options, or 55% of all eligible options, for cash." Apparently, the distressed price at the later half of the enrollment period discouraged lots of potential sellers.

It still bothers me, however, that the announced average closing price is $25.5720. Things become very strange because between November 14 and December 8, there are actually 16 trading days and the average closing price of those 16 trading days is $25.5775. To get to the $25.5720 average price out of the 16 trading days, the only way is to remove December 2 (closing price = $25.66) from the history. The difference is less than a cent, but for 345 million tendered stock options, it may mean up to a million dollar difference.

I'm still scratching my head ...

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