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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: lawdog who wrote (34692)	5/5/2000 9:32:00 PM
From: Jeffrey D	Read Replies (2) \| Respond to of 77400

Quote from the following article. Obviously, not Lawdog's alias on Yahoo. Jeff "But a few hours later, a Yahoo user who goes by Hung_Like_John_Holmes had something even more accurate to offer: "CSCO buyout @ $135," announced this self-identified 34-year-old male. " =SMARTMONEY.COM: Did Word of Cisco's Big Deal Leak Out? 05/05/2000 Dow Jones News Services (Copyright ¸ 2000 Dow Jones & Company, Inc.) By Alec Appelbaum and Matthew Goldstein NEW YORK (Dow Jones)--There are plenty of ways in which Friday's announcement that Cisco Systems (CSCO) will buy ArrowPoint Communications (ARPT) was unstartling. Cisco is a highly acquisitive company, and ArrowPoint's Internet-switching equipment would seem to be right up its alley. But were there some investors for whom the $5.7 billion deal wasn't just unsurprising - but a sure thing? On Thursday, the day before Cisco's announcement, ArrowPoint stock rose 27%. After the trading day ended, a message appeared on ArrowPoint's message board on Yahoo: "Someone knows something we don't...." Was the message poster correct? It's not yet clear whether ArrowPoint's Thursday leap was the result of any leaks about the deal. The fledgling Internet stock - like all fledgling Internet stocks - has been known to make some violent moves in the past. An analyst did release a favorable report on the company Wednesday night. And Thursday's move came on high - but not unprecedented - volume of 576,200. Still, there were signs that something unusual may have been going on. At 7:15 p.m. ET Thursday, a Yahoo poster using the name CLsmove declared that a deal was on tap. "ARPT bought by the big dog," CLsmove wrote, volunteering himself or herself as a Cisco shareholder. That may have been nothing more than a smart guess. But a few hours later, a Yahoo user who goes by Hung_Like_John_Holmes had something even more accurate to offer: "CSCO buyout @ $135," announced this self-identified 34-year-old male. Actually, it was $135.40, but give our priapic poster his due. He made his call nearly 11 hours before Cisco released the news. Neither the SEC nor the National Association of Securities Dealers would comment on whether or not they are looking into possible illegal insider trading involving ArrowPoint. ArrowPoint CFO Cynthia Deysher says she knew nothing of the postings. "I would find it curious that [the specific price] would be on a post," she says. It's not so remarkable anymore to see Cisco, the market leader in selling equipment that makes the Internet run, pony up billions of its stock to buy a promising technology. This is the company that paid $8 billion last summer for Cerent and Monterey Networks, two shops that at the time of purchase had roughly $10 million in combined sales. Cisco has always said it would buy other companies whenever those companies exhibit a culture and technology that can help it win business. ArrowPoint fits the bill. It makes equipment that sends (or "switches") Web pages speedily along a network. The company's customers include big sites like Yahoo! (YHOO) and Internet service providers like Excite At Home (ATHM). So anyone could have predicted that Cisco might buy the company. (Indeed, Cisco may have tried to do so before ArrowPoint's May 31 initial public offering.) When we asked her why her company's stock might have climbed so dramatically on Thursday, ArrowPoint's CFO pointed to the Wednesday night release of a report on the company from J.P. Morgan. In its 36-page report, Morgan, one of three underwriters on ArrowPoint's IPO, forecast 250% compound annual revenue growth for the next two years. That report, "Bringing More Intelligence to the Web," provides little speculation about an imminent merger. It mentions that some of ArrowPoint's top execs have sold companies in the past, but it also names Cisco as a nascent competitor. Securities lawyer Stephen Schulte says the posting on the Yahoo board, coupled with the sharp run-up in ArrowPoint's stock Thursday, does raise eyebrows - although he says they're not necessarily an indication of insider trading. But Schulte, a partner with New York firm Schulte, Roth & Zabel, doubts that an analyst's report would be enough to move the company's stock to such an extent. "Either that J.P. Morgan analyst has one hell of a following or there has to be another explanation," he says. (Lawrence Carrel provided additional reporting for this story.)