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

To: RetiredNow who wrote (58442)	3/12/2002 2:29:57 PM
From: Ibexx	Read Replies (3) \| Respond to of 77400

MARCH 12, 2002 Cisco Owns Up to Andiamo The Enron scandal and the ensuing paranoia around accounting appears to have prompted Cisco Systems Inc. (Nasdaq: CSCO - message board) into finally disclosing details of its investment in storage networking startup Andiamo Systems Inc. Cisco, which divulged the information in its quarterly filing with the Securities and Exchange Commission (SEC), says it owns 44 percent of Andiamo, having pumped $42 million into the firm as of January 26, 2002, and promised an additional $42 million in funding. That would bring Andiamo's total funding to around $190 million. What's more, Cisco says it has an option to purchase the remaining interest it doesn't own in Andiamo for Cisco stock that could be worth as much as $2.5 billion. Cisco says such a spin-in of Andiamo will happen no later than July 2004 -- if it occurs at all, since the acquisition is contingent on certain conditions Andiamo must meet. In addition, if it decides to buy Andiamo, Cisco says it will provide another $100 million in funding. Until now, Cisco has never publicly acknowledged its involvement with the company, even though its relationship with the IP storage switch maker has been reported several times in Light Reading and Byte & Switch (see Cisco Reaffirms SAN Strategy , All Eyes on Cisco , and Cisco’s Secret SAN Strategies Revealed ). While Andiamo's other financial backers aren't known, Veritas Software Corp. (Nasdaq: VRTS - message board) is rumored to have taken a stake in it (see Andiamo: Getting Warmer? ). Andiamo did not return phone calls requesting information (gigantesco surprise). Why did Cisco wait until now to reveal its funding of Andiamo? A Cisco spokeswoman says the disclosure was prompted by a new SEC guideline, known as FR-61, regarding liquidity and capital resources -- including off-balance-sheet arrangements. The rule was issued Jan. 22, 2002, after the Big Five accounting firms petitioned the SEC, in the wake of Enron's meltdown, to require companies to provide more information about financial transactions. "We're providing the information in the spirit of FR-61," says the Cisco rep. "It's an attempt to be more open and more transparent." The purchase price of Andiamo, Cisco says, will be determined by applying a multiple to the actual revenue generated from sales of its products during a three-month period, on an annualized basis. A Cisco spokeswoman wouldn't say which three-month period it had in mind (nor when Andiamo might actually start shipping products). Cisco's option to buy is exercisable only if Andiamo -- based in San Jose, Calif., in a building it shares with Cisco -- has "satisfactorily completed the development of a specified product by a specified date and commercial sales of that product have commenced." Again, no details about when the product might ship. Cisco says it made its initial investment in Andiamo in the quarter ended April 28, 2001. Since then, Cisco disclosed, it has accounted for $38 million of its investment in Andiamo as research and development costs on its own balance sheet. That $38 million of Cisco R&D spending amounts to 100 percent of the net losses of Andiamo, "as if such losses constituted development costs of Cisco," the company says in its SEC filing. In addition to its Andiamo interest, Cisco disclosed that it has given another $38 million (of a total commitment of $58 million) to three unnamed startups. Cisco has accounted for $29 million of the total as an R&D expense. The aggregate acquisition price for these three would be $500 million in Cisco stock. One of the mystery startups is thought to be Calix Networks, which has appointed Carl Russo, Cisco's VP of optical strategy, to its board (see Calix Boosts Management Muscle ). — Todd Spangler, Senior Editor, Byte and Switch byteandswitch.com Ibexx

To: RetiredNow who wrote (58442)	3/12/2002 4:42:10 PM
From: Ed Forrest	Read Replies (1) \| Respond to of 77400

Daytrading is not the key to wealth for most people. Maybe the lucky few will get rich, but I bet those lucky few as a percentage of the whole equate to the same percentages of people who walk away from Vegas winners. MM The last figures published, to my knowledge, were that only 17% of day traders were successful. Most daytraders flit from issue to issue. I on the other hand trade only one stock and that of course is Cisco. Since last April when I started this journey I am up 34%. My goal is 18-20% per annum. With a few weeks to go in my first year I've surpassed my goal due to the fact as pointed out by Jacob Snyder yesterday that Cisco has been range bound. On another note I see you've thrown down the gauntlet in the "10 Q Challenge Event". Good luck; I think you'll have your hands full.:) Ed