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Technology Stocks : Cascade Communications (CSCC)
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To: Paul Dubsky who wrote (3302)3/31/1997 4:55:00 PM
From: Dee Jay   of 3743
 
thanks for posting that, Paul - it needed saying. As an ASND holder I'm of course not pleased to see 20% erosion in one day, on top of earlier losses, but for the long term this is a company (and a combination) that was smart enough to realize that the 900 lb gorilla (named Cisco) wasn't about to be generous to its direct and indirect competitors. Old Revolutionary War chant - in unity there's strength.

I think a lot of the selling on both sides of the equation came about from people who did not see the synergies or who wanted them right now as opposed to maybe a year or so away. Others saw the Bay fiasco as reason to run and stillothers felt that Cascade would drag Ascend down, but if the managements are to be believed the uneven order flow at Cascade is believed to be a temporary glitch. Someone (the Motley Fool column, I think) suggested that Cascade held back releasing some new products so that they'd be fresh out of the starting gate with the new company.

It's known that more than a year ago the 2 mgmts were talking to each other, which prompted sort of a denial in the SF Chronicle in January 1996 by Mory Ejabat, so the theory that this has been in the works for a while could easily be the case.

If you think that consolidation is occurring in the networking stocks take a look at aviation and defense industries - we now have one major plane producer, now that Boeing has gobbled up McDonald-Douglas which itself was a combo of 2 companies. The industries are vastly different but the reasons for combining are the same - efficiencies and product lines necessary in order to combat the competition (Airbus in Boeing's case).

Dee Jay
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