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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 84.82

+3.0%

Feb 6 9:30 AM EST

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To: Stock Farmer who wrote (55274)	9/16/2001 9:02:14 PM
From: Wyätt Gwyön	Read Replies (1) of 77400

hi John, From '95 to 2000, approximately 1.9 billion shares have been created for acquisitions and stock options. Shares outstanding 5.0 B (split adjusted) in 1995, 6.9 B in 2000. Of that, 1.02 billion were for exercised stock options. Just over half. that really puts in perspective how the wealth is being transferred from shareholders to employees. it is crazy not to recognize option compensation as an expense imo. i think it is even crazier for csco to buy back $3 billion of their own stock at current prices. we can see that csco would have to pay almost 5 times that amount to undo the dilution of the employee option exercises since 95. another way of saying that is, in my humble opinion, that their reported earnings understated their actual cost of labor by 14.47 BILLION DOLLARS for that period (minus the exercise price of the options, or the paid-in capital from employees). if the "real value" of that labor was more on the order of 1 billion dollars, then csco should wait till their stock falls below 1 dollar (or one dollar above the paid-in capital from exercising employees, to be more precise) before buying the shares back IMHO.

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