Too Little, Too Late In CSCO
At last count, seven firms had
downgraded Cisco Systems
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PowerRating). Talk
about gathering a consensus! The last time I saw such negativity was when Mr.
Blackwell put Britney Spears at the top of his worst dressed list! Those
firms that downgraded included: Robbie Stephens, Lehman, Morgan Stanley, CS
First Boston, Dain Rauscher and ABN AMRO. My question to those analysts is
WHAT TOOK YOU SO LONG? Wasn’t Mr. Chambers clear enough in Davos when he
warned that this quarter presented significant challenges? I mean, that is
Wall Street speak for “we ain’t gonna make our number," so why didn’t
these guys downgrade last week? Even if they thought, or hoped that CSCO would
make their number, did they think the outlook going forward would be strong?
If so, put me down for some of what those guys are smoking!
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As our $ weighted money flow shows, we’re seeing
significant action on the puts of both Broadcom Corp.
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PowerRating) and Sycamore Networks Inc.
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options. Some of the BRCM action is from some of those put spreads that market
makers are trading, but the action is decidedly bearish nonetheless. With BRCM
down 12 1/4 to 80 1/4, the stock is hitting the low end of its 80 — 140 range
that its been in since November.
Sycamore Networks (SCMR) is seeing even more bearish action. 1000 Jan 2002 50
puts traded and nearly 500 June 100 puts as well. Both are BIG puts, $28+ for
the Jan 50 puts and $76+ for the June 100 puts.
Microsoft
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PowerRating) is a standout on the
$ weighted call side of the street. FEB 60 calls dominate active trade in the
software maker, as just under 10,000 have traded in the $4 range.