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

To: marginnayan who wrote (54161)	7/26/2001 10:20:55 AM
From: Ed Forrest	Read Replies (2) \| Respond to of 77400

Do you think this will happen and in that case do you see further downside risk to Cisco stock? M I see neither dramatic up nor downside movement in Cisco at this point in time. One has only to look a current 3-month chart to draw that conclusion. Many investors, at all levels, are just waiting this drought out and simply will not commit new money in these depressed times. As in the past this will change. When is the burning question? Cheers

To: marginnayan who wrote (54161)	7/26/2001 11:19:24 AM
From: Alidotr	Read Replies (3) \| Respond to of 77400

A lot of people seemed to have missed a key point about the France Telecom deal. France Telecom said Wednesday it had appointed Cisco Systems and Juniper Networks as the only two suppliers of IP networking equipment for its developing North American backbone project, due for completion at the end of this year. totaltele.com

To: marginnayan who wrote (54161)	7/26/2001 2:09:57 PM
From: RetiredNow	Read Replies (2) \| Respond to of 77400

Complex question. Cisco historically has avoided price wars. They rely on value added services and superior products and customer service to win deals. In addition, they have stepped in with financing if need be. Now we have a radically different landscape, where Lucent and Nortel are dumping networking gear on the market cheap to try to compete and bankrupt firms are doing the same to raise cash to pay off debts. Auctions are choked full of nearly new networking equipment. So it follows that Cisco has had to begin engaging in a price war in order to keep up their sales levels as much as possible. We've see the evidence of this in their gross margins over the last few quarters. GM is coming down. Now having said that, here's what I think. Cisco will continue to avoid a price war whenever possible. However, when it is inevitable, Cisco will win the price war. Cisco has the best cost structure of any of their major competitors. The only company with a cost structure even remotely as good as Cisco's is Juniper. However, Cisco now has a product competitive with Junipers. In addition, Cisco has targeted Juniper as a threat. Therefore, it is probable that Cisco will engage in competitive pricing to beat Juniper at the game on any sales engagement. I bet you Cisco wouldn't mind sacrificing margins to beat Juniper and gain back market share. It's not the normal Cisco we've grown used to, but a new feral Cisco that is concerned with taking market share and beating their competitors while they flounder in the uncertainty of the current economic conditions. So yes, they are and will continue to engage in pricing wars until consolidation takes its toll on their competitors. It's affect on the stock? The stock will continue in a trading range until evidence of the success of their strategy starts to appear. When the uncertainty starts to clear, we're all hoping that Cisco will emerge the clear leader in their space. Nortel and Lucent are almost out of the picture, only a few biggies remain and only a handful of small companies like Juniper are even a threat. Cisco will emerge more powerful than ever a couple of years from now, and the stock will rise back to it's old heights of March 2000 within 5 years. Just my opinion.

To: marginnayan who wrote (54161)	7/26/2001 2:34:24 PM
From: GVTucker	Read Replies (1) \| Respond to of 77400

marginnayan, RE: If Cisco does indeed follow this strategy, it will likeley hurt its margins and ultimately it's bottom line. Do you think this will happen and in that case do you see further downside risk to Cisco stock? There is downside risk to every stock at all times. If that risk wasn't there, there wouldn't ever be opportunities. Indeed, if you cannot see a downside risk in a stock that you're looking at, you haven't looked hard enough. Any time an analyst tells me that a stock has no downside risk, I know that either A) the analyst is an idiot or B) the analyst is knowingly pushing a piece of junk. Is it possible that the scenario that you fear will happen? Sure. That's the risk. You need to assess what the chance is that the risk will materialize before you decide whether or not to buy the stock.