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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 73.77-0.2%10:17 AM EST
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To: bambs who wrote (39836)9/12/2000 11:49:18 AM
From: GVTucker  Read Replies (2) of 77400
 
bambs, RE: "..the impact of pooling which, if included, would result in a negative taxable income exceeding $13 billion for fiscal 1999 even though Cisco reported a gross margin of more than $7 billion."

Mr. Parish doesn't understand pooling accounting. Pooling dilutes income, it doesn't reverse it.

"The most ingenious aspect of Cisco's scheme, however, is that by using a combination of pooling and stock options to understate costs, it can then focus on manipulations of gross revenues and undercut competitors with self financed leases to sustain its pyramid. This is where leasing may indeed play a key role in manipulating what analysts call top line revenue growth."

If this was the case, then CSCO would not be creating incremental growth in reveneues per share with its acquisitions. But they are, which discounts this point also.

We both agree that CSCO is not worth the current price (although it could very easily bounce from the low 60's over the next month). Using Bill Parish's analysis discredits this viewpoint rather than reinforces it, however.

Mr. Parish tried spamming SI at one point to get publicity for his rather weak research. Thankfully, that doesn't happen any more. But his research is still weak.
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