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Technology Stocks : Newbridge Networks
NN 15.87+2.5%Dec 5 9:30 AM EST
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To: Glenn McDougall who wrote (9372)2/5/1999 10:08:00 AM
From: Dennis R. Duke   of 18016
 
Why NN won't take the dive that ASND did in the fall of 1997 based on still posting a profit but missing estimate:

1) NN's financial systems are up to quick reporting. NN in 4 days after the quarter was able to report financial results. ASND began their implementation of the Oracle data based accounting system after the fall crash because it became apparent they did not have a handle on the numbers. This ability to report speaks well for NN's financial controls.

2) They reported the problem early. No one likes surprises, but they can deal with them if the Company is up front. They did not wait until the earnings release to get out the news.

3) They did not promise that the quarter was on track or better as Mory did at conference after conference. ASND surprised the street. NN's old line of business was known to be variable.

4) ASND did not have the ATM switch at the time they fell short. Therefore they did not have a "super product" that clearly was capable of being the forward growth. NN did a great job of showing that the "super product" is a live and growing very well.

So into the teens in my opinion won't happen. If the writers of those comments are expecting a repeat of ASND's fall, I think the above is why that won't be the case.

Will it give enough of a discount for me to take a 30% loss to return is the only question in my mind.

Later, (-8 Dennis 8-)
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