Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (107022)	8/9/2000 11:10:51 AM
From: Eric Wells	Read Replies (3) \| Respond to of 164684

You just have to love that company. Glenn - at 4:15 pm ET yesterday, it seemed as though every investor in the nation (if not the world) was waiting breath abated in anticipation of Cisco's numbers. We knew that if the company disappointed that the market would most certainly decline today - perhaps decline substantially. But what from Cisco's earning report has resulted in such market jubilation today? $500 million in revenue (the amount by which Cisco beat revenue projections) and a penny a share in pro forma earnings (the amount by which they exceeded income projections)? And it was these two things that made everyone breath a sigh of relief and caused a surge in tech stocks this morning. Perhaps, I'm too negative. But I have to wonder why the street is focused on Cisco's pro forma numbers. Isn't Cisco beyond the rapid growth stage associated with young companies that generally drive analysts to focus on pro forma numbers? Did Microsoft release pro forma numbers when they announced their earnings recently? Did Intel? Well, maybe Cisco's "real" numbers are just as impressive - but too difficult to analyze. But maybe the "real" per share income growth numbers are not all that impressive. Does purchased in-process R&D, payroll tax on stock option exercise, acquisition related costs, amortization of goodwill and purchased intangible assets, etc. amount to anything when it comes to analyzing operations? Maybe no. Maybe yes. Regardless of whether the street focuses on pro forma or "real" numbers, it just seems to me that Cisco's extra pro forma penny per share came from the $197 million in the "interest and other income" line - and that Cisco could have easily adjusted this line to be a penny, two pennies, three or even four pennies a share over if they had wanted. Call me bearish, but it just seemed that every investor on the planet wanted Cisco's report to be good - and so it was. No one seems to be talking about that 125 PE that Cisco sports. I guess I'm still plagued with the notion that at some point, the market will return to valuing companies based on fundamentals. For the record - I own 5 CWY Aug 65 CSCO Put contracts (I had purchased 10 contracts on Friday - sold 5 yesterday prior to market close for a profit - am holding the other 5 in anticipation of a CSCO decline - not that I expect it will happen). Thanks, -Eric