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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.43

-0.7%

Jan 29 3:59 PM EST

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To: The Phoenix who wrote (46063)	1/5/2001 1:29:34 PM
From: Stock Farmer	Read Replies (2) of 77400

Gary: "So you're saying that CSCO has increased revenues nearly two fold but there's no incremental cash from operations...even though margins have eroded only 1 point (maybe)? Where's the money going?" Uuuh... yes... that's kinda what I am saying. Actually, that's precisely what you can interpret from the information the company publishes in it's annual report on form 10K. Please double check my math. It may beg the question "what goes into these operating margins, anyway". Or other questions. Where's the CASH going? Damned if I know! Maybe under the rosy "pro-forma" picture, the cash doesn't really exist in the first place. I honestly don't know. EDIT: THE CASH DOES EXIST. THAT IT ARISES DIRECTLY FROM OPTION EXERCISE IS THE SUBTLE FACT THAT MANY PEOPLE DO NOT SEEM TO SEE. What I do know, and what is irrefutably true, is that in FY 2000 you can account for the majority of CSCO's impressive cash flow as a direct consequence of their stock option plan. So, the COMPANY is impressive. The STOCK PRICE is not. John.

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