The mood in the market remains more tentative than any of us would like, but there’s still a lot of dread and a lot of disinformation for the bulls to overcome before our stocks recover their equilibrium and get back to work. You already know the argument for caution: interest rates are a drag and the Fed isn’t likely to provide any relief for some time to come.

But when you drill down into that argument, every bit of it crashes against cold reality. Start with yesterday’s bittersweet news that SPLK has accepted a $157 buyout from CSCO. Shareholders aren’t sad to see our route to big profit accelerate here. It gives us a good problem: do we sell now or hang around, wait for the deal to close and take the cash?

I’m currently thinking shareholders should take the cash. This is not a stock deal. We aren’t trading our shares for any slice of CSCO whatsoever, which means that we can parlay what’s currently a 34% return (not bad for three months) into 44% when the regulators flash the green light.

Unlike a lot of people, I don’t see a lot of regulatory pushback here. CSCO is big, a former Dow component doing $58 billion a year in sales. SPLK is little, with a revenue track barely 1/20 that size. Putting those numbers together is not a competitive threat to anyone.

And where I really differ from other people in the market is that I recognize that there were a lot of adults in the CSCO room who ran all the scenarios and decided that this deal would go through . . . and more importantly, that the price was worth paying.

That price added up to 41X forward SPLK earnings or 6.3X forward sales. These numbers might look big and scary if you’ve bought into the narrative that every rate hike is automatically a multiple killer, but get real: CSCO saw those numbers and knew that was what it would take to get SPLK leadership to take the bid.

The numbers are tangible. The narrative is more controversial. Growth stocks like ours deserve a premium price, especially when the market as a whole has hit a serious growth wall. The only question is how high the multiples can go in this rate environment, and CSCO just drew a $28 billion line in the sand.

Is CSCO desperate? Crazy? I don’t think so. Back in 2019, SPLK traded at $118 at this point in the year, roughly 63X the forward earnings target. Admittedly, bond yields were down around 1.8% then, so that multiple now needs a significant discount. If CSCO paid that kind of money for SPLK in this environment, I would admit that they seem a little desperate.

But SPLK is also a much bigger company than it was in 2019. Earnings have doubled. If you respect earnings as a way to evaluate what a company is worth, SPLK could have run a lot higher than $157 over time. After all, it’s still expanding at a double-digit rate where the S&P 500 as a whole stays stalled.

I almost regret the fact that the SPLK board accepted the buyout. But this accelerates their exit and they’ll find ways to put the cash back to work in the meantime . . . and so will we.

We know without a shadow of a doubt that Big Tech will pay 41X earnings or 6.3X sales for a company growing about 12-15% a year depending on which metric you focus on. Are any of our companies overvalued at that price? Where “should” they be valued in this kind of strategic environment?