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

To: Adam Nash who wrote (51955)	4/21/2001 12:27:37 PM
From: TobagoJack	Read Replies (2) \| Respond to of 77397

Hi Adam, I am not trying to make any case other than speculating in response to your ruminations. <<You're trying to make it look like you have a lot of arguments against Cisco doing more acquisitions, but in reality there are just a few here>> Actually, I have only one reason, expanded into a train of thought that may or may not wreck, namely "times have changed, and some dinos must perish". When an industry and its customer base grows rapidly, many ventures gets funded, packaged, germinated, incubated, developed, and then IPO-ed, sold at high prices, or otherwise merged into ever larger organizations. I believe most participants in the industry experiences absolute growth even if they lose out on market share. All participants in the industry sports high P/E. All transactions are priced at bribery level. When an industry's customer base is no longer healthy, or otherwise not growing as rapidly, fewer ventures gets started, and what customers there are, gets fought over. Not all participants get valued highly, and competitors and investors trample some participants. How many consolidation moves are there in PCs? If we believe that modern financial and communication magic has compressed the business cycle, the tech product cycle, and the R&D to market cycle, then why not also allow for the possibility that all new industry reach maturity/saturation also at a faster pace, leaving only replacement and improvement sales in its wake, and leaving behind the fancy P/E as a fond memory. What exactly is so special about CSCO that it engenders such sensitive, automatic, and heated defense? Why not defend Xerox with equal gusto? The basic data/telco industry is now not as healthy as before, consolidations will still happen, at lowered valuation and at slower pace. CSCO should not and in fact is not in a big hurry to buy much of anything, as there is simply no competitive urgency. It will be every company for itself for a while, until some semblance of business stability sets in. Will CSCO be buying other good R&D efforts? Yes, of course. Will they buy at the same pace as before? No, of course not, if ever again. They will do at the previous pace again if and only if TMT mania sets in again, and this is a remote prospect, as remote as CSCO at $80. LU may perish, and as it dances the death steps, CSCO will not be chewing up R&D in the form of consolidations at its old rate - where is the urgency, and where are the customers? Chugs, Jay

To: Adam Nash who wrote (51955)	4/21/2001 3:48:41 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77397

I agree with you Adam. It's an obvious conclusion that less IPOs means Cisco can acquire more companies if they desire. One of Cisco's biggest complaints in the boom times of a year or two ago was that the price of the companies they wanted to buy was being driven up and they were increasingly having to buy companies post-IPO, which meant for a lot more money. Now with most companies unable to go public, Cisco has a much better opportunity. In addition, they can step in and become intermediate VCs for these companies to lay and early claim, just in case they are successful. The only reason why Cisco isn't as acquisitive as they have been in the past is that they are temporarily turned inwards to shore up the company. Once they finish with that, they will look outwards again and the acquisitions will pick up.