Doug: Looking into my crystal ball
is quite difficult.
So I want.
I will just try and guess, how's that?
:-)
First I do not think there is " a game " going on.
What objective evidence do you have
that there is a game? Only the facts please.
2nd. I don't expect them to publicize any bids.
That would show other bidders their cards and it would
be a stupid move.
3rd. I don't expect them to publicize any bids they denied.
First so as not to embarrass a potential bidder publicly:"They are
so cheap! type of thing.
second because the bidder can come back
Third because you don't want to give any potential bidders
the idea that others are out of the bidding game and
that " they " are the only ones left and so
they don't have to bid any higher.
4th.TM is never going to say anything unless he is satisfied
and nobody knows what it will take to satisfy
him. I don't even know if he's told the BODirectors.
All I know is hearsay: that 2 years ago he
rejected $70 from LU and that just the past
week he rejected 35.
I will give no credence to the above because there
is no proof.
5th.I believe TM is a very capable and intelligent
person:if he is holding out I believe it is because
he feels he can:
Because he believes in his products;
his people;
in the needs of his customers;
and that he can deliver.
He has reason to be confident: So far NN has never
under performed in any tests.
6th:We may well have a great coming Quarter.
Speculation for lower earnings last Q runs that Lutz took
a very hard attitude towards buyers who waited till the last
2 weeks of a Q to place orders,knowing that NN may be forced
to discount their product to meet Quarterly eps estimates.
He told his salesmen that they would not get any commissions
for sales booked in the last 2 weeks.Rumor has it that he
forgot to tell the same thing to all the customers who had
in the past been used to getting last minute discounts.
So neither side blinked.Result: Customers didn't get their
product and Lutz' sales were down and he was canned.(That
i think was only part of the reason ).
7th:Pearse it appears to me is a better salesman.
First of all he may be very lucky and end up booking this Q,
all of last Quarter's sales that Lutz didn't get!!
Second Pears with the new 50/450 has a better hand
of cards to play with: If this switch is as good as it
appears to be then a lot of telcos will want it
at the same time and as soon as possible .
Well you can't deliver all the switches at the same time.
So Pearse can play the game of rewarding the switches to
-the guys that pay the price
-pay right away
-and that he'll remember who's who for future rewards.
Remember: these are all competitors and they all will
want the switch before the other guy.
-he can tell buyers who are not buying current products
waiting for the new switch , that the new switch will
go to people who continue to buy now.
-of course all these potential orders are going on right now.
People I think would be lining up for the switch 6 -12
months ahead.It is like getting summer reservations for a
resort in high demand: you have to early.
-the advantage is that Pears can come up Feb 24 and say:
" hey , we got all sorts of people interested to buy this switch ".
-Pearse can be enterprising and if there are a lot of orders
he can further outsourse to try and get as many of these cookies
out the door before LU/ASND can say " hey wait
a minute, you can't go this fast, it isn't fair, we haven't
caught up to yet! ".
So I think Doug NN is sitting pretty right now.
They know the hottest item in the market right now is
internet though ISPs, CLECs and Telcos.
They know that the best and fastest platform in this field
wins.
They know they have the best and fastest switch.
That they are 18 months ahead of LU.
They know they are sitting pretty,
and that they some time to get the best bid. This
doesn't have to be a firesale.
I think also that any bidders will soon realize this.
They also know that if Flynn pulls this one they are going
to be a much more formidable bone to pick later.
It is to their every advantage to give TM a larger price now,
than an even bigger one later.
Especially when you consider that if NN gets a big R&D cash infusion
from the mother ship who knows what kind of
wonder switches the NN engineers might be able to
pull out:
IP-Optical over ATM connecting switches at the last mile?
Muxing photons with electrons?
Yeah, that ought to be worth a few bucks,
TA
Message #15961 from Doug at Dec 17 1999 7:00PM
Tunica: Its extremely hard to decipher the contents and establish whats real. Surely,if NN had established a sale or
was close to one it would have ensured the occassional leak.
They are caught at their own game; they cannot disclose any of the following.
a: No bids
b: Bids but low price
c: Bids but T.M is not satisfied
d: No bids but they never wanted to sell
They will have to face the street some time next year. Because of that there are 2 game plans that make sense
a: Super earnings this Quarter or
b: Sale before that.
No other game plan will be acceptable. |
