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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: Stock Farmer who wrote (67248)	3/9/2005 2:40:22 AM
From: Elroy	Read Replies (1) of 77400

The reason is that it is a more expensive way of accomplishing the same thing - the market will demand its share of profit for standing in the trade. True, but if all major public corporations did it, the profit margin for the option sellers would be really, really small. We get the same effect if we require Cisco to report what it would have paid on the open market if it had to acquire the options. True, but that's not the upcoming change, right? Also, the income statement and cash flow statement get fuzzy if CSCO reported the cash it would have paid on the income statement, but didn't actually pay, so it doesn't appear on the cash flow statement. I say make them really pay for OTC options and give those to their employees, because it might affect their decision to use options as compensation or not. In fact, CSCO would have a hard time telling its employees they are going to buy $10 worth of CSCO at the money calls and give them to the employee, rather than just give the employee a $10 raise.....

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