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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 73.69+0.4%Jan 21 3:59 PM EST
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To: RetiredNow who wrote (57438)2/11/2002 12:32:05 AM
From: Stock Farmer  Read Replies (1) of 77400
 
Multi Part Reply Part 4: Additional Paid In Capital

Except for the math (I would use a different path and probably therefore come up with a different number) we are in agreement as to the qualitative problem: the business seems to have vanished a lot of shareholder cash contribution.

How about we pause for a second and compare the amount that you say vanished to the total profits the business has ever generated. Both values are approximately 7 Billions. Give or take some fraction that is "not material".

If I take your money, misplace a whole pile, and bring in a similar sized pile of profit, how much profit have I really generated for you?

And then, if half of that pile of profit is set aside to offset the "goodwill" into which I converted some more of your contribution along the way, now how much profit have I really really generated?

And then if I've promised shares of whatever's left over to me and my closest buddies that will cost you the other half of that profit to buy off... well... me and my buddies are richer and you aren't.

And then I might say: "Don't blame me, first, I'm just doing my job. Second, I've reported what I've been doing quite openly according to GAAP all along. Now, we're going to make more revenue and record more earnings next quarter, so can I please have more of those options?"

What a sweet job that would be.
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