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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: Wyätt Gwyön who wrote (55277)9/17/2001 9:50:07 AM
From: RetiredNow  Read Replies (1) of 77400
 
The way Microsoft has succeeded with stock options is that they usually go out on the open market and buy the equivalent shares that they issue in options. That way they offset the dilutive affect. I think Cisco should do the same. If it turns out that, the company feels it's a bad idea to do this, then maybe they'll also feel bad about issuing stock options. It kind of ties company pain to the cost of doing business, no?

Otherwise, I do think the way Cisco has issued stock options is dilutive. I had no idea that half the shares issued were due to stock options. I'll check the math on that when the 10K comes out. If that is the case, I still think it is a good idea to start shrinking that o/s share number over time to protect their EPS. Cisco is a mature company now and they can't keep acting like EPS doesn't matter. Very soon, if not already, purchasers of Cisco stock are not going to be looking for value in their topline growth, rather they are going to be looking for value in their bottomline growth. That means they need to act more responsibly in that area, which in turn means, cutting costs, reducing o/s shares, and offsetting future stock options grants with open market purchases of shares.
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