Whatever, John. Of course I don't believe that stocks are directly correlated to some event one way or the other. In this case however, there was a large grant, and the street appears to have taken it to mean things are looking up business-wise. I guess we won't know whether that is the case or not for awhile. Those options sure didn't cause the stock to tank, we do know that.
But anyway, to read this thread, you'd think that Cisco's use of options virtually invalidates any legitimate value Cisco provides as a company. I mean the people on SI are so P!ssed off about Cisco's options policy they try to make Cisco into some sort of evil empire wrt corporate citizenry and (I believe) there is a fair amt of disappointment when none of this doom and gloom comes to pass. How many times have we heard over the past 3 years that Cisco is cooking their books anyway?
anyway from your prior post,
I've been on this board constantly using the *actual* costs of stock options at exercise as the metric by which I evaluate the past performance of companies.
Using this metric, for example, Cisco has *never* been profitable. Try figuring it out for Siebel or Oracle. If you think Silicon Valley is up in arms about hypothetical costs, they would probably scream blue murder if they had to restate earnings based on *actual* costs! Now that would be a picture to see!
The fact that Cisco has never been profitable in its entire existance when options are expensed pretty much makes the case against expensing options right there. 20 billion + in the bank, 16K employees, 70% GMs and 4.5 billion in revs per quarter... and the company has never been profitable. Sounds like funny accounting to me, on the "expense" side, which of course it is. Of course you can always take the position that somebody did once on another thread, that the only reason Cisco has any cash on hand is due to sale of stock. Obviously he wasn't aware of the latest quarter's GMs. |
