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HI Nitish!

I´ve read your posting and Warren Gumps postings on
options. I think Warren delivers almost all answers
to your questions. But I´d like to say something about
what you wrote under no.2
You wrote:
"2. from what i understand, option-issuing companies obtain the right to 'print more shares' to
typically pay out exercised options. however, aren't these options essentially assets formerly owned
by the company then transferred to the employees. (by this reasoning, you can probably tell i'm
also not a fan of these stock buybacks either.)"

I think that one of the main points for the usage of
options is that they are meant to motivate employees.
It´s a question of how these stock options plans are build.
If it´s easy for employees to make money out of the options because the exercise price was set to low it is
questionable if granting options is really a good thing.
But you shouldn´t forget that that coin has two side
(old german saying ;) ). If the options cannot be exercised by the empoyee cause the stock price is too low the company in a way saved money it otherway had to pay to their employee( if there was no stock option plan).
But why don´t you like stock buybacks? After a buyback
the profits are distributed on less shares, therefore
you are better off.
It´s like a dividend but dividends are due to taxation!
Buybacks are not as far as I know.

That´s all for today

Fool on

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