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

To: Elroy who wrote (67244)	3/8/2005 11:33:43 AM
From: Gottfried	Respond to of 77400

Elroy, good idea! So simple and straightforward. Gottfried

To: Elroy who wrote (67244)	3/8/2005 12:05:21 PM
From: Stock Farmer	Read Replies (2) \| Respond to of 77400

Hi Elroy, "companies like CSCO should be required to purchase all of their employee compensation options in the open market and then the "expense" would be crystal clear...",/i> As much as that would be a 'good idea' from an assurance of financial accountability perspective, it's probably a bad idea for us shareholders. The reason is that it is a more expensive way of accomplishing the same thing - the market will demand its share of profit for standing in the trade. We get the same effect if we require Cisco to report what it would have paid on the open market if it had to acquire the options. And the market will use the most efficient and most accurate method it knows to set the price. Which, for better or worse happens to be Black-Scholes or a derivative. Since the market will use Black-Scholes (plus spread for profit) to set the price, we cut out the middle man and the middle man's profits if we just require the company to report their profits AS IF they had spent the cash. Presto.

To: Elroy who wrote (67244)	3/8/2005 1:45:54 PM
From: Kirk ©	Read Replies (1) \| Respond to of 77400

"People have said this would inhibit startups that lack cash from using options to attract employees - fine" This is not true despite what they say. Startups give out options at pennies... all they would have to do is give out restricted stock and take the expense hit at the time of the grant, when they are not making any money anyway. Once they have gone public, why screw the shareholders who you want to buy the stock so it goes higher? What I can't stand is to be a small investor with 1,000 or 2,000 shares in a company only to find out a director got 45,000 options to exercise and he holds less shares in the company than I do! Options carry zero risk for those who hold them since the holder has no money invested. We as shareholders need to change this. Kirk