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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.03

+0.8%

3:59 PM EST

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To: Tony Viola who wrote (34584)	5/3/2000 9:25:00 PM
From: bambs	Read Replies (3) of 77399

CSCO EARNINGS 40% bogus! Don't kill the messenger! You have to comment on the message. What is the real P/E of CSCO? If you don't take into account this ridiculous tax benefit CSCO's P/E would be 310 at current levels. If the stock stops going up this tax benefit will not be had. Employees will demand more pay as the options will be worthless. CSCO shareholders will suffer at the end of the day. The writing is on the wall. CSCO is going down. Just a matter of time! CAPITULATE! "Believe it or not, U.S. tax law allows companies to deduct as a corporate expense the capital gains paid by their employees when they exercise their options. It's completely absurd, but it is what it is, and this is another reason why tech earnings are overstated. Last year, for example, Cisco got a boost of $837 million to its July 1999 fiscal year using that tax benefit, which represented 40 percent of its $2.1 billion net income" by W.F. Bambs

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