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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.42

-2.4%

Jan 20 3:59 PM EST

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To: RetiredNow who wrote (56649)	1/14/2002 1:45:58 PM
From: Stock Farmer	Read Replies (1) of 77400

Yah, I saw that. Except in the draft I was picturing they could just cross out the word "Operating" and insert "Shareholder Infusion" in crayon ;) As a side note (and in response to your question), know any company with a lot of low-priced stock options issued that can be bought at outrageous prices to re-stock the option pool? Which led to some random musings. What's 2-3 Billion in bottom-line after-tax benefits when the stock's at $20? At $20 strike that works out to 100 to 150 million shares. At $0 strike, works out to 300 to 450 million shares. Somewhere in between seems quite achievable. Where are we? Well, 354 Million exerciseable between $0 and $18.57 as of July '01. Weighted average strike $8.53, that's 350 Millon at $20 market gives 4.4 B$ infusion potential. [Yes Jeff, all facts] Which led to some other random musings. Certainly unoriginal. I am perhaps a few years late in qualifying myself as a CFO... but maybe a shift to the dark side is in order... here goes my attempt at a mind meld... Who needs cash flow from operations when a company can generate numbers like this in after-tax free cash flow? Just by having employees hang around issuing press releases for a year with the stock stuck in a trading range. Let's see... $4B a year with 7 Billion shares. Hey... that's $0.61 per share in free cash flow. At a PE of 33 (Very low for a tech darling) that makes a price of $20. Wow. Isn't that neat? If only we could really do that crayon trick... but just the other way around... hmmm.... ... aah... ah ha!... eureka!!! We can!!! ... so, all my company has to do is issue enough stock options per year to be worth its current stock price. Which being worth it will keep the stock price where it's at which will keep those options from going under water which will keep them being exercised which will make it worth it... Cool. Yes... why bother with operations??? Well, I do need operations. At least enough to employ the insiders. Maybe I'll have them issue lots and lots of press releases. About how their hob-nailed boots are making an ever larger impression on the butts we are kicking. As the butts get bigger and bigger and thus our boot marks take up less and less surface area, we'll just point to butt growth potential. And if the butts we're kicking get smaller and smaller then we'll jump up and down and up and down about our increase in market share. All sizzle, no steak. And if we hire really good writers I'm sure we can sizzle with the best of them. Of course, such new economy math assumes a Supply of Clueless in perfect balance with Demand for Ponzi. Which precarious balance we seem to be maintaining at the moment. Who knows. It could go on and on and on... better rush in and explain to the board of directors... I wonder if they'll go for it?

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