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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 75.19

-0.1%

Jan 16 9:30 AM EST

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To: Uncle Frank who wrote (58538)	3/17/2002 2:29:05 PM
From: RetiredNow	Read Replies (1) of 77400

well, I have no problem with acquisitions, if they are net accretive to earnings per share. I think Cisco has made some big acquisition blunders, but on the whole their approach is pretty successful. But employee options are a problem for all of us shareholders. They should be reacquiring shares on the open market to offset that kind of dilution at the least, and they should be accounting for it as compensation expense on the income statement, so we can more easily see the effects. Then as to their cash hoard, Dave first brought it up and I've continued to think that contrary to the common thought that it's a great thing to have $21 billion in cash, I think it creates an agency problem. They should keep what is necessary for riding out downturns and for working capital purposes, but the excess cash should be used for acquisitions and if they can't find anything worth buying, then they should payout dividends. Since their cash hoard is continuing to grow beyond what the company can effectively invest, I think they should buyback shares (and alot more than they currently are doing) as the most effective dividend to current shareholders.

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