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

To: Eric who wrote (50091)	3/15/2001 10:21:19 PM
From: Stock Farmer	Read Replies (2) \| Respond to of 77397

Hi Eric - the company has no debt. But shareholders do. CSCO has effectively sold millions of calls to its employees. As of 2000, 418 M at average $9.44 strike. On 7.2 B shares, 412 M is about 6% dilution or, at $20 per share $1.16/share. This represents about 8 B$ or so obligation by the owners of the company. In my books, that's debt. It's just in the pockets of shareholders rather than on the books of the company. Very clever if you ask me. In a very Japan-like kind of way, this debt is being evaporated quite rapidly by a deflation of the CSCO currency. In a very "max pain" kind of way, more of this debt is being held underwater to be drowned. Which for shareholders everywhere is a very up-close-and-personal example of why inflation is bad. John.