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

To: RetiredNow who wrote (57674)2/19/2002 1:34:31 PM
From: JeffT  Read Replies (1) | Respond to of 77400
 
Just having more outstanding shares is NOT the problem mindmeld. The problem is dilution of the current (at any given point in time) shareholders stake in the company. Cisco could do a 2 for 1 split here and thereby lower the market price to $8.45 (16.90 / 2) per share, and that would be ok. No change in the current shareholders stake in assets, liabilities, earnings, etc.

But the continual "disproprotionate" growth of o/s shares through stock options, and other means, has been very dilutive to existing Cisco shareholders in the past. There has also been substantial dilution over the years by Cisco using it's stock as currency to purchase other companies. Hopefully, any future acquisitions will be accretive to earnings "per share" very quickly after any merger.

Jeff



To: RetiredNow who wrote (57674)2/19/2002 1:55:55 PM
From: Boca_PETE  Respond to of 77400
 
mindmeld - You've got it exactly! In that situation, I would sell the stock. If I knew the process would continue and was inclined to live at the edge, I would even consider short selling the stock.

P :-)


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