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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 78.32-0.1%Jan 30 9:30 AM EST
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To: The Phoenix who wrote (47788)2/2/2001 11:52:29 AM
From: bambs  Read Replies (1) of 77400
 
If CSCO sells calls they are betting the stock goes down. When investors see this they will sell their common or go short taking the stock further down. This activity has nothing to do with dilution this is perception. Of course the end game here is to buy them back at a lower price...... if Cisco believes the stock will recover... which we assume at some point Cisco believes the stock will recover.

they don't have to bet the stock is going down...they are just selling the right to buy stock. they will get some money for that right up from, even if it doesn't go up they still have that money. Then they print the shares when the option is exercised by the purchaser and collect the funds. The only cost is dilution.

Think about it...re-read my last post.
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