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

To: JDN who wrote (41615)	10/28/2000 8:58:22 AM
From: Thomas M.	Read Replies (1) \| Respond to of 77400

CSCO IS THE BANK Bank, sub-prime lender, what's the difference? -g- I suggest CSCO's debt rating ought to be GREATER than say CITY BANK. I doubt CSCO will be bailed out by the Fed when they get in trouble, like Citi always does. Tom

To: JDN who wrote (41615)	10/28/2000 10:34:23 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

JDN - CSCO is way more than "The Bank". It might as well be a currency! With enormous cash on hand (5.9 B$ in US/state/muni & county gov't bonds is not going to evaporate readily), it's also has an almost sure supply of cash not yet on hand. Amongst other things, a stock option with an exercise price less than market price is almost like cash in the bank. One might call it a "public bond", secured by the market price of the stock. And CSCO has a lot of them. Check out 2000 10K, section 10. 971 options granted (outstanding), average exercise price of $24.19 - Total 23 Billion or so. With average life of 6.87 years gives an approximate expected cash inflow of $4 Billion per year. Wow. Exerciseable options are 418 million. Even if we ignore the 5 million with strike greater than $28.61, as long as stock is above this price they can expect 3.7 B$ sooner or later. Clearly this shows that Stock Options are Really Cool. Employees get money (after tax gains). Company gets money (exercise price, plus tax benefit). Government gets money (taxes from employees, minus tax benefit to company). Everyone gets money. And the money comes from investors - who don't seem to mind in the least.