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Technology Stocks : Newbridge Networks

NN 15.07

+3.8%

2:21 PM EST

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To: Tunica Albuginea who wrote (14885)	11/21/1999 9:12:00 PM
From: thebeach	Read Replies (3) of 18016

Interesting post from Yahoo: There are only two companies not interested in NN. Lucent is supposed to be one of them. I am not convinced Lucent isn't interested. They could put a lock on the WAN core market and even control the access market through LMDS and ADSL. Lucent could ensure there would be no squeeze on margins in the future. With so many companies that could benefit from NN's technology it is hard for me to imagine how anybody who has a little business sense and a small understanding of the technology can believe a company will be able to get NN for only $33 a share. If ATM technology was so easy to develop Lucent wouldn't have paid $20 billion for ascend. I don't believe for a minute they paid that much for the Ascend customer base. This fact alone indicates how much time and money it takes to develop ATM technology. So why wouldn't a company pay $10 billion for the best ATM technology in the market place. As I have stated previously you have to take into consideration the hidden value of the affiliates on the balance sheet. The acquiring company can sell the interest in the affiliates for $2 billion easily. The acquiring company can also sell the TDM business, high margin and no furtrher research and development expenditures needed. TDM revenue could easily be $500 million a year. The TDM portion could be sold for $1.5 to $2 billion. There is still a lot of demand for T1 products. I still think it will be CSCO who will put forth the strongest bid. If Chambers wants NN he will not be cheap. Look at his history, stratacom and cerent. He may even go for a 1 for 1 deal just to get rid of the other sharks from Europe who only want a bargain and a good one at that. The best thing for Newbridge shareholders to do right now is to hang tight or we will hang alone. Don't let individuals on this board convince you to sell out for peanuts.

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