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

To: Lizzie Tudor who wrote (67223)	3/6/2005 2:46:08 PM
From: rkral	Read Replies (1) \| Respond to of 77400

Lizzie, re "And before you say it is the options themselves causing the stocks to stagnate ..." For some stocks, that might indeed be the case. Say a company earns $1 billion and burns $1 billion to repurchase stock to keep shares outstanding constant -- to offset the dilution of option exercises. The next year the company earns 15% more, but also burns 15% more to offset dilution. And assume the 15% growth of both numbers continues year after year. Is a long-term stockholder -- holding through all of that -- really any better off than at the beginning? I think not, and think PE multiples would contract as a result. Ron