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

To: Gold Beach who wrote (50630)	3/29/2001 10:48:21 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

DWM - On CSCO stock as a currency for acquisition. It's not the relative price of the stock that matters. It's the perceived Net Present Value of the purchase consideration that matters. Back when CSCO was doubling every year, 1B$ of CSCO stock was "worth" a lot more than 1B$ cash in NPV terms. Enter some tough love and now the table turns. 1B$ of CSCO stock in February is worth 500 M$ of CSCO stock in March... well, you can see that very few BOD's are going to leap at the chance to say "sure, pay me in stock", and Cisco's BOD is going to want to conserve cash. Also, with CSCO saying "It's only a flesh wound, really" and claiming 2H recovery, target companies, can merely sit out the period if that's true. It's a dangerous game. We are going to see a lot of grief. But regardless, Chambers' about face on acquisitions is a big deal. A big wheel has come off the CSCO war chariot. John.