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Technology Stocks : Foundry Networks, Inc. FDRY
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To: Techplayer who wrote (604)12/13/1999 2:37:00 PM
From: jmanvegas  Read Replies (2) of 1225
 
Brian: The LU/ASND deal eventually went off in the low $20 billion range went it finally closed - that is the final cost to LU - not $17-18B. I'll agree with you that ASND's access technology is growing but sequentially it is slowing. FDRY is growing approximately 25% sequentially per quarter, much faster growth in a more dynamic niche of the networking market currently. It is the leading provider of next generation switches and is eating CSCO's lunch as far as new business is concerned - so is JNPR in core routers. For example, would you pay over 20 times for revenues for CSCO with a PE approaching 80 and a market cap of $330B for a 35% annual growth. Maybe you would. I wouldn't!! Now if you want to argue that all tech stocks are over-valued, I could agree with that. But FDRY isn't any more over-valued than any others. And I'll take 100% annual growth over 35% annual growth any day. Not that FDRY is a very volatile stock with a very low float and one needs a strong stomach to take the swings. But the split indicates to me that management is comfortable with future growth, revenues, and earnings. And the funds want in so FDRY had to split the stock and stabilize it somewhat. We'll see what happens. I believe the FDRY story has much more to go. Good luck to you.

jmanvegas
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