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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.11

+0.9%

Nov 21 9:30 AM EST

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To: Elroy who wrote (61759)	10/9/2002 9:05:10 AM
From: GVTucker	Read Replies (3) of 77400

Elroy, RE: And looking forward, most employee options have gotta be underwater, so as long as Cisco keeps its current share repurchase program in place (pretty easy with an $8.50 share price, $20 billion cash and strong operating cash flow) you're likely to see the reverse of dilution (Is there one word for the opposite of dilution? share concentration?) in the upcoming year. As of the fiscal year end 2002, there were 7.303 billion shares outstanding. Total diluted shares in the EPS calculation were 7.447 billion. That implies that there are 144 million options out there right now that are dilutive. At the current market price, CSCO needs to spend about $1.2 billion if they want to just keep things constant. In addition, new hires are still being given options at the current market price. I seriously doubt that CSCO will be shrinking the float through share buybacks unless they start spending some serious bucks. The diluted shares outstanding may very well decline, as they did in the last fiscal year, but that will most probably be a result of a declining stock price (which renders more options useless) rather than share buybacks.

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