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

To: RetiredNow who wrote (63075)	2/11/2003 4:33:57 PM
From: GVTucker	Read Replies (1) \| Respond to of 77400

mindmeld, RE: Another model that I really liked was the one that Coca-Cola is using. Read up on that. They were really innovative about finding a market based way to record the expense, rather than using skewed guesstimates like Black Scholes. And you know what the primary tool that the investment bankers that Coke hires will use? Black-Scholes. Coke's method might be better. But it won't vary more than 5% from a Black-Scholes calculation.

To: RetiredNow who wrote (63075)	2/12/2003 12:04:35 PM
From: rkral	Respond to of 77400

OT ... mindmeld, re "there have been multiple displays of numbers showing how if Cisco or Seibel or any other options generous company used Black Scholes, they would have grossly overstated expenses during the bubble years." Don't confuse over-compensation via stock options as over-statement of stock-based compensation. There's a huge difference IMO. Suppose the fair value of Cisco's stock-based compensation is $2,500 million every year, and this fair value is amortized per SFAS 123. Compare the option grant of a bubble year, when the stock is $50, .. with the option grant of a "bust" year, when the stock is $15. In which year do existing shareholders get the better deal? Ron