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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (71187)	12/1/1999 9:17:00 AM
From: Les H	Read Replies (2) of 132070

Cerant Part II...You may remember a while back when Cisco laid out $7 billion for fiber player Cerant Tech. (a company with six month revenues of $10 million and losses close to $30 million). Well, in a case of "new era" deja vu, Redback Networks shelled out $4.7 billion in Redback monopoly money yesterday to purchase Siara Systems. In a true case of long term investing, Siara actually has no revenues or currently marketable products at all. Of course Siara is developing a system using fiber to manage and speed up Internet traffic. For it's M&A prowess, Redback was rewarded with an immediate $588 million one day increase in its own market cap. Redback now sports a total market cap of $6.5 billion. Revenues? $20 mill in the 3Q. Earnings? Lost $1.6 million in 3Q. We just have one question. Since Siara currently has no marketable products, can Redback write-off the entire $4.7 billion acquisition price as in-process R&D? Since the Street is willing to grant "companies of the 'Net" essentially free capital, anything goes. We guess we just can't fault Redback for accepting manna from heaven. contraryinvestor.com

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