Are Tech LBOs Driven By Option Expensing?

O'Connor, Colleen Marie
April 2005
Investment Dealers' Digest;4/4/2005, Vol. 71 Issue 13, p10
Trade Publication
The article reports that technology companies are going private. The high costs of complying with the U.S. Sarbanes-Oxley Act is an often-cited reason for such moves. Market insiders believe one reason that technology companies are specifically interested is the looming deadline for expensing employee stock options. Stock options are a particular interest of the technology world, having been heavily extended by technology companies for years in an effort to woo talent. Beginning this summer, however, all corporations will have to comply with the ruling from the Financial Accounting Standards Board that employee stock options are a cost to a company and, in turn, companies must now carry that cost on their income statements.


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