Intel and Cisco Systems Planning for Future

Cisco Systems (CSCO, $16.50, down $0.35) completed a $4 billion debt sale on Monday raising speculation that the company is poised to make an acquisition. Cisco recently reported earnings that managed to beat Wall Street’s expectations by 6 cents although those estimates were lowered.

The company generated over $3 billion dollars in cashflow during the quarter on $9 billion in sales and ended the quarter with nearly $30 billion in cash. One name that is being tossed out as an acquisition for Cisco? Research in Motion (RIMM, $59.50, up $0.50). There is some action in the RIMM March 80 calls (RFYCP, $0.16, down $0.03) but I don’t believe anything is going to happen that fast and it is all speculation.

We also got news this morning that Intel (INTC, $15.09, up $0.18) plans to invest $7 billion over the next couple of years to improve efficiency at its manufacturing facilities here in the U.S. The overhauled facilities will be able to make faster, smaller chips that consume less energy.

This is good news for Tech which has helped the Nasdaq to a slightly higher open.

Rick Rouse
Rick@OptionsMentoring.com

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