Hi Mark;
Needless to say we all have had trying times of late with Newbridge.
We now have several "events" occuring at the same time that are a drag on the stock.
STII - The deal imo will go through although the company would be well advised to use cash. A stock deal at this low price will send the wrong message to the shareholders and the street.
Earnings - I agree with Pat, the company has no choice but to keep quiet. The very last thing we need is another Q that is missed either by whisper # or the actual #. In this case short term pain must be paid regardless of the price.
If management were smart they might consider what VO did this morning and move up the earnings release for the end of Q. A word of advise for the management (should you take the VO idea) don't tell anyone what you are doing prior to taking the action.
FIDO - what a love hate relationship. I hope that they finish the job and get the he.. out of the stock if that is what they want to do. This overhang on NN shares is tough on us all. (I now have my largest holding in Newbridge ever)
I feel for the employees of the company, they all are working dam hard and looking at options worth zero. Based on what I hear many are being called by other companies, its tough. I hope they hold the line, everything I know tells me that if we are not at the bottom we are near.
Below is a article by Jim Seymour from thestreet.com. I respect his perspective on the market.
Regards
Glenn
P.S. I don't feel its game over by a long shot but I do understand how you feel. ASND was sold to LU for ~25 Billion
less than a year ago and today NN has a market cap under 4.
Perhaps LU paid to much but lets get real Newbridge is far more valuable that 1/6th of ASND. I have cash on the sidelines and am waiting to put it to work in Newbridge.
Beyond the Mayhem of IBM's Plunge May Lie Opportunity for
Individual Investors
By Jim Seymour
Special to TheStreet.com
10/21/99 4:52 PM ET
Hey, when I was talking abut Y2K panic, I didn't mean this kind of madness. I was talking about consumers running
around, pulling money out of banks, stocking up on canned beans and buying generators.
But this market is so fearful, so on the edge anyway, that IBM (IBM:NYSE) CEO Lou
Gerstner's relatively gentle direction last night about Y2K-related sags over the next
couple of quarters led to market madness.
Not only did IBM get knocked down to 90 1/8 at the opening this morning -- a level at
which, by the way, it may well be a buy for buy-and-hold investors, if there are any of those still around -- but the
disease was, as my eight-year-old says, "catchy." Sun (SUNW:Nasdaq) down, Hewlett-Packard (HWP:NYSE) down.
Dell (DELL:Nasdaq) down. And so on.
By the close, IBM had rallied back only a point or so, to 91 1/2, for a stunning 14%-plus overnight drop.
Just offhand, would you say this market is looking for something -- anything -- to get spooked by? Is my calendar
wrong? Did Halloween come early this year?
This drop in tech stocks was not triggered by reason, but by frantic trading by institutional managers who didn't want
IBM on the books, didn't want to be associated with IBM, and just flat got out. "Y2K" became short-hand for "offer big
blocks at or just under whatever the market is," and it was bombs-away time.
A lot of money managers are devoted right now to protecting their 1999 gains. I know people with juicy, 35% to 45%
gains who have decided to strip out anything even slightly dodgy. Why risk losing their big year's big gains if things
ebb -- and especially if they fall apart -- between now and the end of the year?
It's defend-the-cookie-jar time for them, protecting their record. Who said they had to be fully invested? And who can
criticize them for battening down their hatches?
Here's another case where smart individual investors have a real advantage over the institutions. No, you can't stop
the madness, and if you held IBM this morning, you got hurt, period. But you don't have to buy or sell now based on
fears about how it will look to someone else when a quarterly report comes out showing your holdings.
Trade smart: Don't sell under pressure -- at least, without good reasons.
Want to sell? That's another matter. Look at your realized gains for the year. Do you have a stock or two trading well
down from when you bought it, one you no longer have much confidence in? This may be a safe period to dump it,
book the loss for tax time next April, then re-establish the position later (if you want to) at a much lower basis than you
have now.
Watch out for the wash-sale rule, of course. But you may have enough time in this market to run that
30-days-out-of-the-game drill, then get back in before the stock you sold kicks back up materially.
Lost, for some, in the bad news was yesterday's good news, and today's robust move in the market, for Aware
(AWRE:Nasdaq) holders, of which I'm one. With the agonizingly slow rollout of ADSL by the RBOCs, shares of Aware
-- a premier developer and licensor of DSL technology -- its shares had been drifting down from mid-July's near-60 to
yesterday's close at 20 7/8.
That hurt. Since Aware is on my list of stocks to watch this year -- and especially since anyone who bought in this time
a year ago, when I first mentioned Aware, got in at around 5 to 7, and had a heck of a nice gain by that July high -- my
mailbag has been filled for months with notes from worried Aware holders.
As I've written here before, I think most of the slide this summer and fall was due to widespread misunderstanding of
a decision by Cisco (CSCO:Nasdaq) to add a second DSL-technology supplier, in addition to, not in place of, Aware.
And, of course, from market frustration with the RBOCs' sloth-like DSL rollout, which has retarded the revenue stream
Aware will earn from them.
Last night Aware and Intel (INTC:Nasdaq) announced a licensing agreement which looked like it would reverse that
trend.
And how. By the close, Aware was up a stunning 11 5/8, to 32 1/2. That's a 56% move from Wednesday's close, and a
lot of Aware investors are obviously breathing more easily.
Both Aware and Intel were mum on the details of their deal, and neither would put a price tag on it. It covers the
licensing to Intel "for use in future Intel products," both Aware's G.Lite slowed-down DSL technology and also,
thankfully, its full-rate DSL patents.
The Intel deal looks even better for Aware since it comes in the wake of competitor Alcatel's (ALA:NYSE)
announcement last week that it had snagged what smells like a huge deal with SBC Communications (SBC:NYSE),
the biggest and maybe the clumsiest of the RBOCs, to supply DSL equipment and technology for SBC's DSL rollout.
(Note that that "largest RBOC" title may well be fleeting: The merged company resulting from the proposed Bell
Atlantic (BEL:NYSE)-GTE (GTE:NYSE) deal will top SBC, assuming it's approved by regulators.)
SBC, which includes the former PacBell and Ameritech in its portfolio, along with its own Southwestern Bell
customers, has announced plans to spend $6 billion over the next three years on its "Project Pronto" DSL-capacity
upgrade.
The French phone-equipment maker acquired DSC Communications a year ago; the Litespan product line SBC's
buying from Alcatel came along in that acquisition.
I'm convinced Aware is still strong, and has a bright future over the next few years.
There were other bright spots for tech investors today. America Online (AOL:NYSE) was up; Gateway (GTW:NYSE)
was up on word of AOL's $800 million investment in Gateway (GTW:NYSE); Exodus (EXDS:Nasdaq), a
TheStreet.com (TSCM:Nasdaq) supplier which I am long, moved up 6 5/16 against this cranky market; and Austin's
Vignette (VIGN:Nasdaq), which produces a superb Web publishing system, soared over 30% on good quarterly
results. (Get ready for a nice split, VIGN holders.)
But none of that takes away the pain for those who got bushwhacked on the IBM craziness, does it?
Jim Seymour is president of Seymour Group, an information-strategies consulting firm working with corporate clients
in the U.S., Europe and Asia, and a longtime columnist for PC Magazine. Under no circumstances does the
information in this column represent a recommendation to buy or sell stocks. At time of publication, Seymour was
long Aware and Exodus, although holdings can change at any time. Seymour does not write about companies that
are current or recent consulting clients of Seymour Group. While Seymour cannot provide investment advice or
recommendations, he invites your feedback at jseymour@thestreet.com. |
