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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 76.11+0.9%3:59 PM EST
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To: The Phoenix who wrote (47586)1/30/2001 10:27:06 PM
From: Stock Farmer  Read Replies (1) of 77400
 
Gary - agree or disagree, post facts or fiction, but guessing at another person's motivation isn't called for, OK?

I'm all for watching when CSCO's investment in growth goes down without impairing their growth rate - over the long term, of course. Let's watch growth rates versus spend rates, shall we? I may go back and do some trend analysis and observe patterns forwards.

As to whether or not stock option tax benefit is material to the business? Nothing you have posted has helped me view it otherwise.

I showed the difference in stock price could (hypothetically) produce a $1B difference in tax benefit vs '00. $1B more to the IRS means $1B less to spend growing the business or buy startups or corporate equities or whatever a business might do with cash. Without using a calculator, I took about $1.00 B and divided it by about 7 B shares and ended up with about $0.14/share which compares favorably in size to CSCO's projected earnings.

Earnings versus cash flow? In the end it's real cash that goes to the IRS or real cash that goes to growing the business or real cash that gets spent. Cash is king.

Conclusion: stock option tax benefit is material to the business, even if my number's big by a factor of two.

Somewhere along this line of what appears to be remorseless logic you found room to conclude that stock option tax benefit is not material to the business. If so, we disagree most profoundly - the basis for which I would like to understand.

Not because I am trying to be right. But because I still respect the value that can be created with a mere $1B.

John.
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