Don't you think that if there were anything wrong with Cisco's books, it would have been uncovered by now?
It has been uncovered; it is called failing to report stock option expense on the income statements.<g>
And don't forget all the aggressive revenue reporting made by Cisco during the bubble resulting from loaning money to customers to buy Cisco products---who subsequently went out of business. There is little doubt in my mind (now) that Cisco's performance during the boom was never as great as it was cracked up to be. Even ignoring stock option expense, the great reported revenue and earnings growth in Cisco's quarterly reports during the boom were mostly questionable pro forma numbers.
latimes.com
Snips:The story of Cisco's aggressive lending — little scrutinized until now — emerges in dozens of interviews, as well as reams of court papers and regulatory filings. It highlights the lengths to which one of the darlings of Wall Street would go to keep reporting revenue increases during the height of the tech boom.
Yet even though Metrocomm was in the process of interviewing bankruptcy lawyers, it did find one party perfectly willing to extend more than $62 million in credit: Cisco Systems Inc. Cisco proved downright eager to lend Metrocomm — along with scores of other telecom firms with shaky financial positions — billions of dollars in financing over the years.
The loans weren't made out of charity, of course. Rather, the transactions helped fuel a steady rise in Cisco's revenue.
That's because when the company's financing arm, Cisco Capital, lent cash, the borrower would in turn buy Cisco gear. More typically, the credit came in the form of Cisco equipment itself. In many cases, Cisco counted the transaction as a sale, even before the customer had begun paying off its debt
Nevertheless, I am not sorry to see Cisco rally since I still have some of my original shares.
Jmo, Huey |
