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

To: Stock Farmer who wrote (67890)	5/17/2005 1:23:19 PM
From: RetiredNow	Read Replies (2) \| Respond to of 77400

John, that's an interesting theory. But wouldn't the benefit Cisco enjoys by underpricing the new securities be more than offset by the lack of a fair price they receive for the new securities? If that's the case, then wouldn't it be in Cisco's best interest to sell the securities at a fair price, instead of at below FMV?

To: Stock Farmer who wrote (67890)	5/18/2005 4:04:21 AM
From: Elroy	Respond to of 77400

Obviously, the purchasing financial institutions will be motivated to pay the lowest possible price for these options. I haven't read it in great detail, but wouldn't CSCO be the purchaser (not the seller) of these options from Morgan Stanley? That would make the most sense, if CSCO bought the options from MS and then gave them to CSCO employees, and the expense would be (of course) whatever CSCO paid for them. I've always maintained that a company should just buy call options on the open market, give them to its employees, and the expense is then obvious (whatever the company paid). The interesting thing about the CSCO idea is that employees will be able to see the exact value of their stock options (since there will be a set of them that are publicly traded). I would imagine there will even appear a derivative market that allows employees to sell their unvested options forward, with penalties if the employee leaves the company or somehow causes the vesting to stop.