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Technology Stocks : Newbridge Networks

NN 11.97

+5.4%

3:59 PM EST

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To: Esway who wrote (14287)	11/3/1999 5:44:00 PM
From: Thomas DeGagne	Read Replies (1) of 18016

This excerpt from the news release seems to be key: "Despite the setback this quarter, the Company's ATM+IP -- or WAN (wide area network) packet -- switching revenues were up approximately 40 percent compared with a year ago. WAN packet order intake increased by approximately 20 percent on a sequential basis. " This indicates that the revenue shortfall was in the TDM area and NOT the ATM segment in which very strong growth continues. The fact that TDM sales in the US are falling is not a surprise. Investments are switching to switching (couldn't resist that line). My biggest concern with Newbridge is NOT their share of ATM revenue or the growth of the ATM market. It is the merger with Stamford communications. Is the merger on and at what price? If the merger is called off it will hurt the stock, probably for a long time. If somehow the merger is on at the same terms it will be a boost for the stock. That would be a minor miracle. Revised terms for the merger are the most likely in my opinion. What they are is anyones guess. Stay tuned.

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