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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.18

+0.2%

Dec 26 3:59 PM EST

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To: bambs who wrote (44700)	12/17/2000 8:46:16 PM
From: The Phoenix	Read Replies (3) of 77400

as options trade under water, csco will have to pay tax (hurts cash flow) options won't be executed (hurts cash flow) key employee's and exec's will leave or demand more cash to stay One question... and one point. Q. How much tax savings benefit is actually a result of options exercises? P. Options vest over 4 or 5 years at Cisco... so many of today's options have a cost basis well below current trading levels. One could argue that the lower the trading the price the MORE options that will be exercised since one would want to exercise and hold at low stock prices... Your scenario could have some validity if CSCO was trading at <$50 for the next 3 years. Until then I postulate that any benefit the company gets from stock option exercises actually INCREASES as the stock price sags. OG

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