Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: The Perfect Hedge who wrote (11316)	1/4/1998 5:43:00 PM
From: Matthew	Respond to of 77400

Glen; Why do you think this is a significant amount of shares? As a CISCO employee I can tell you that the company has very generous stock option plans. For many, the value of those options is huge part of their net worth. I think you will agree that it is not wise to have say 80 or 90 percent of your net worth in one stock - even CISCO. These individuals are just diversifying. What you cannot tell from the filings is how many outstanding options, both vested and unvested, these individuals have. For some directors and VP's that info is in the Annual Report albeit a bit outdated. Now if you see massive selling in terms of percentage of net worth I would be alarmed. For example if say 20% of insiders sold all of their CISCO holdings AND excised and sold all vested options, I would pay attention. I personally have sold quite a bit of stock this year even though I am extremely bullish on the stock for the coming 6 months specifically and longer term in general, for two reasons. 1) Diversification. 2)Also because I exercised (and held) a good deal of ISO's. This means I will be subject to the AMT and my CPA has advised me to go ahead and exercise the NQ options since my marginal tax rate will be the AMT rate (28%) as opposed to ~40% if I excised them in a typical year. I am just a first line engineering manager, these folks could easily be in similar situations and in spades as they get more options in year then I have gotten in the past 4. If you do not understand what I am talking about then all the more reason you should not trade on Insider sales. The dynamics at work are more than the filings can tell. Insider buying of course is a completely different story. Regards, Matthew

To: The Perfect Hedge who wrote (11316)	1/4/1998 5:57:00 PM
From: AJBurl	Respond to of 77400

That is such a small amount of stock if you consider the billion share float. If you trade on such standards, you might look at the chip stock IDTI where one insider ,Carl Berg, has purchased 700,000 shares with prices ranging from 9 1/2 to 11 5/16. In addition to Berg, around 6 other insiders from Pernham(spelling?) the CEO to various other VP have bought significant amounts of stock. In comparison to CSCO, IDTI's total shares outstanding is 81,000,000. All the purchases have been since mid-november 1997.