Home Depot (HD) taking $200M Charge Over Options

HOME DEPOT (HD-NYSE) is also in the stock options soup, so now it is even getting into DJIA components.  This is not “just” isolated to high growth tech companies and the practice is obviously finally coming out that there were wholesale effort to take options granting.  Shares of HD are down 1.7% at $39.35, but this may just be another chance to buy dips if you are a Bull.

HD just fessed up and said that excluding related tax consequences, of approximately $200 million in the aggregate.  This will result in an increase to paid-in capital of approximately $200 million and a decrease to retained earnings of the same amount.  If you care and want to read through this, you can link to it here.

If you were a stock broker in the 1990’s to early 2000’s you saw more trickery and guile with deceit that was used where companies were able to reward employees with stock options.  I was a broker overseas for a small part of the 1990’s, and it was always amazing when you would hear a foreign executive of a US company describe how his company issued out options.  It was even funnier hearing how each European country was trying to tax them.

Jon C. Ogg
December 6, 2006