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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 77.80

-1.9%

Dec 12 9:30 AM EST

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To: RetiredNow who wrote (52146)	4/25/2001 9:10:22 PM
From: Stock Farmer	Read Replies (3) of 77400

Hi Mindmeld - let's be specific. I used 3.9 B$ as eFCF to start because I eliminated the recontribution to the company by purchasing shareholders. It is clearly not fair to value the dollars in the right pocket to include those that will be taken from the left pocket as "incremental". Also, I think you must have assumed some sort of share buyback in the order of several billion shares or so along the way because outstanding shares are over 7.4 B already with another 0.5 B options granted plus whatever options will be granted over the next 34 years at about 0.2 B per year. So if you take out the 8 billion share buyback x 16$ average price your DCF model would represent = 125 B$ from the 130 B$ you came up with, well the kitty is drained to about a buck a share or so. Alternately, CSCO could stop issuing stock options or... maybe the price goes down... I don't know. My $4 looks generous. Jay's math doesn't help things much either. John.

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