Cisco Message Board - Msg: 14133361

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Technology Stocks : Cisco

CSCO 71.08

+0.1%

Nov 7 9:30 AM EST

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To: Curtis E. Bemis who wrote (142)	7/30/2000 11:46:56 AM
From: The Phoenix	Read Replies (2) of 405

I think NT will fail again. Of the companies they have purchased in the past many have had good products, management, and engineering teams. NT hasn't shown any capability to acquire a systems company and execute. They are basically taking ATON out of play - just as they took Bay out of play and as ALA took XYLN and FORE out of play. All these acquisitions only help CSCO. The more I watch large companies fail at acquisitions and Cisco succeed the more I believe Chambers when he says it's not easy. As far as I'm concerned only Cisco has shown any success in executing with their aquisitions and even they don't have a 100% hit rate. All that notwithstanding - $7.8B for a $100M run rate and negative returns highly competitive market where F5 just disappointed (translates into more success for CSCO I'm guessing). I think NT is making a mistake. THE GAME NT is attempting to use their stock value to get into more of Cisco's space while Cisco is using their stock currency to penetrate NT's optical space. To date NT's game is to price erode and take value out of Cisco's space - a game that has so far failed (NT is losing money in the enterprise and edge). And doesn't it seem stupid to purchase a company only to errode prices and lose even more money? Isn't that what they're doing with BAY - dropping prices 50% and announcing OIE? Who was the brainchild behind that one??? DUH. EDIT - Added - Comment from Kenneth by way of the Cisco thread. ragingbull.altavista.com Cisco OTOH is executing to penetrate and generate earnings from the optical space. They are now on a Billion+ run rate (Cerent is looking like a good buy all the sudden). The game is being fought on NT's territory and NT has failed to take the game to Cisco's space. Every % point of market share gain for Cisco in optical space is gravy. In the meantime Cisco has shown an uncanny ability to protect their own markets - the only exception being high end routing where they have gone from 100% market share to something like 80% due to JNPR penetration. Still the losses there are being more than made up in the optical space plus exit strategies by COMS, LU, and even NT - although they won't admit that OIE is an exit strategy - it is. OG

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