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

To: BWAC who wrote (63623)	4/19/2003 3:12:11 PM
From: Lizzie Tudor	Read Replies (3) \| Respond to of 77400

I agree completely, the real problem is excessive options, and shareholders want to curtail them with expensing... using a false claim of increased accuracy in financial reporting as the motivation for accounting changes. One thing further though- if a stock such as cisco is held primarily by institutions, and Cisco rallies on a new stock options grant, there are only 2 possibilities imo: 1. institutions are not on the side of shareholders for one reason or another or 2. Institutions understand the risk/reward equation for options and think they are appropriate and postive for the company in question on some occassions.

To: BWAC who wrote (63623)	4/19/2003 5:44:46 PM
From: hueyone	Respond to of 77400

BWAC, That the overall level of stock option issuance would likely fall if stock options were expensed, is a conclusion where the most vociferous opponents of expensing stock options are in agreement with the most vociferous people in favor of expensing stock options. Of course the impact would vary from company to company, with some companies likely to dramatically curtail option issuance whereas for other companies there would be no change. But the fact is, retaining the ability to report favorable earnings would be a strong incentive not to issue excessive options once options are expensed. Indeed, the loudest voices opposing expensing stock options, Technet, AEA and the VCs, all regularly make the argument that the rank and file would be hurt by stock option expensing, because companies would not grant as many stock options if stock options were expensed. Renewing a political battle that Silicon Valley lobbyists thought they had won years ago, the Financial Accounting Standards Board brushed aside two of the tech industry's main arguments. First, the board refused to waver in its stance that options are a corporate expense. Second, it dismissed warnings that companies will dole out fewer options to rank-and-file workers if options must be reported as expenses. siliconvalley.com By the way, the FASB dismissed the argument about the expensing of stock options impact on rank and file, not because the FASB made a finding of agreement or disagreement with the argument, but because the argument is not germane to FASB's mission---determining whether options are in fact an expense, which they have determined in the affirmative. Regards, Huey