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

To: Kirk © who wrote (64486)	9/11/2003 10:13:17 PM
From: rkral	Respond to of 77400

Kirk, re "Your example sums two events, stock exercise and stock buybacks" There was no stock buyback. Outstanding shares increased. The additional shares were bought by existing shareholders. The number of events is of no significance. We are only interested in the net changes in assets due to the sequence of events. Obviously, the fewer the events .. and the fewer entities with changed assets .. the easier the evaluation. re "when you ran into the little problem that the stock increased in value, then you had to make up a third event" An increase in stock value is not a problem. At grant, the option had $0 intrinsic value .. since the exercise price and the market price were the same. If the stock doesn't increase in value, the option won't get exercised, and we have nothing to discuss. As I said above, the number of events is irrelevant. The employees experience an asset gain. We only need a sequence of events which identifies an entity which experiences the loss .. in a manner which quantifies that loss. re "make up a third event, a dividend, to make a point" Nothing wrong with that. The dividend is paid with shareholders' equity .. which shareholders own. re "Bottom line is I was right." Wrong. Regards, Ron

To: Kirk © who wrote (64486)	9/11/2003 11:58:05 PM
From: hueyone	Respond to of 77400

Stock holders give up a fraction of their company, 2% for many tech companies Two per cent seems like it could be tolerable, but unfortunately many companies have far exceeded a two percent rate the last six or seven years. Here is SEBL's grant rate for example: #reply-18992683 More info on stock option overhang, etcetera: #reply-18549223 Here is an article suggesting that companies like Apple are replacing underwater options with new ones: Tech Companies Find Options Hard to Kick online.wsj.com Do you know what Cisco's grant rate has been? Regards, Huey