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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 71.08

+0.1%

Nov 7 9:30 AM EST

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To: Lizzie Tudor who wrote (60736)	8/6/2002 10:15:49 PM
From: hueyone	Read Replies (2) of 77397

I actually agree with him. No surprise there. I expect your opinion is the predominate one in Silicon Valley. Cisco can't afford to come clean on stock option expensing and has to fight it with everything they got. Chambers couldn't possibly say anything other than what he did. I don't think the black sholes method of expensing options is accurate, it overstates, sometimes dramatically. Ok, let's phase in expensing for stock options by starting fresh with expensing stock options issued in 2002 and thereafter. Companies will have time to adjust their compensation programs to the new reporting requirements and they won't be forced to recognize all the underwater options granted during the bubble. Those options will continue to be amortized over the vesting periods in the 10Ks where no one notices them. Overestimating---even if it were the case that Black Scholes tends to overestimate stock options expense, the far greater sin is the known underestimation of stock options expense by massive proportions, as is currently the case by reporting the stock option compensation expense as zero. Everytime politicians get involved with equities they screw things up- just like in the mid 90s That's right.....When the FASB decided that stock options should be expensed on the income statements in 1994, Congress (at the paid requests from Silicon Valley executives) forced FASB to back off their recommendation, and thus stock options expense were relegated to the 10k footnotes where they remain today....where no one notices them. washingtonpost.com Best, Huey

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