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To: Kelvin Taylor who wrote (30891)	4/16/2001 9:45:23 PM
From: Larry S.	Respond to of 53068

a crapper to watch: ONT - On2 - announced major increase in revenues: biz.yahoo.com ran 22% today. caution, this is a penny POS, but moves. larry

To: Kelvin Taylor who wrote (30891)	4/16/2001 9:57:38 PM
From: DanZ	Read Replies (2) \| Respond to of 53068

Investors normally ignore extraordinary gains and losses and only worry about actual results and expectations for recurring operations. Cisco said in March that they expected to cut 8,000 jobs, so I don't think the 8,500 job cuts or the charge are unexpected. 2,500 of the jobs were temporary and contract workers, which is better than if all 8,500 were full time employees. They will save about $1 billion annually, and this could be seen as positive by the market. I don't think that the magnitude of the inventory write-off was expected, but companies typically try to get as much bad news off their balance sheet when they think a bottom is near. The biggest problem for the stock, IMO, is that sales will be down about 30% sequentially in Q3 and are expected to be down as much as 10% sequentially in Q4. The positive here is that the sequential drop is expected to drop, if that makes sense, and it could be seen as the beginning of the end to the decline in their business. It will be interesting to see if the 52 week low near 13 holds tomorrow. Three things to keep in mind: 1. Stocks nearly always top when all the news is good and nearly always bottom when all the news is bad. 2. Even with the decline in sales, Cisco's third quarter sales will be about $4.7 Billion, and fourth quarter sales will be about $4.2 Billion. 3. Despite a short term slowdown in Cisco's business, they are poised for long term growth, albeit it's harder to grow sales 50% from $20 billion than from $8 billion. The current estimate for next fiscal year is $0.56 per share, down from $1.01 only 90 days ago. I can see the mean estimate falling to $0.40 to $0.50 per share over the next week. If the stock can maintain a PE of 25 to 30 and the EPS estimate is in that range, the floor should be between 10 and 15. It will be interesting to see how the stock trades over the next few days. It bounced off 15.50 after hours today, but tomorrow will tell a better story. Assuming that business picks back up next year, I think the stock could easily double from 10 to 15 during the next 12 months. That would suck for people who bought at 70, but it would be a good return from here.