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Technology Stocks : Ascend Communications (ASND)
ASND 213.36-3.3%3:59 PM EST
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To: hitesh puri who wrote (58233)12/21/1998 3:40:00 PM
From: Sofa Kingdom   of 61433
 
Consider that Cisco is positioning itself to be a player when voice and data converge onto the same media. They are cutting their teeth on voice over FR and VoIP (voice over IP). They purchased Selsius (a PC based phone switch) and will have an ethernet-phone offering early next year. They will eventually compete with LU on voice equipment.

I don't think Ascend is going down the same path. In my view they are sticking to the big switch market. Buying Cascade was very strategic, and got them a presence (and big profit) in the voice arena but they don't seem to be working toward making an offering outside of high-end switches. Don't get me wrong the stock is a winner. I think the lack of diversification is what keeps getting them mentioned as a take-over target. They would be easier to integrate into another company.

LU could use what Ascend has but it will need several other companies to compete head to head with Cisco in the data arena. If LU pays a premium for Ascend (ASND is hot), will they have enough money (liquidity)AND be able to integrate AND buy one or more other companies quickly enough to present a useful offering to businesses. It sounds to me like they are drawing three to get an inside straight. Odds are bad. If LU tries to stall the voice/data convergence(a Microsoft move) Cisco can keep moving into voice markets.

Right now I see Cisco with better long term potential. Ascends short term looks great. Lets see where they go. They could be good too in the longer race.
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