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Technology Stocks : Newbridge Networks
NN 14.21+1.7%Nov 28 12:59 PM EST
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To: Brian Hutcheson who wrote (3853)3/22/1998 4:11:00 PM
From: Thomas Scharf   of 18016
 
>It also has outstanding buyout possibilities < WRONG! The buyout possibilities approach ZERO as long as TM controls anything like his current 24% of the stock. I like it that way. A buyout is a quick profit for the traders that destroys a great long term investment for those who do their research and plan to hold stocks for the long term.

After a buyout, you end up holding shares in an entirely different company, usually with lesser upside potential. You are left with the choice of staying with an investment in a company you didn't choose, or selling, paying the resulting taxes, and finding a new place to put what remains of your money.

NN is a pure play in a specific technology with a great management team. What do you have after a takeover by oh, let's say LU? Can you define LU? They are in so many businesses that you can't really say whether you are investing in internet infrastructure or semiconductor manufacturing or any of 20 other segments of high tech industry that LU competes in. On top of that, LU has the legacy of ATT management which means slow decision making and always lagging the market with new products rather than leading the pack (the old Bell Labs created lots of new technology, but they didn't deploy it very aggressively). The upshot is that you own a company that belongs in a much more conservative portfolio than what you started with.
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