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Technology Stocks : Efficient Networks Inc - (Nasdaq- EFNT)
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To: Mark[ox5] who wrote (440)9/17/2000 9:10:06 PM
From: Mark[ox5]  Read Replies (1) of 675
 
We would like to revisit an issue we addressed in this newsletter two weeks ago-an increasing disconnect between investor sentiment in the network core and access areas. We noted then that the access sector has significantly underperfromed the core index over the past few months, gaining 18% year-to-date compared to an 85% rise in the core index. While this gap has narrowed nearly 10% over the past two weeks, we would like to reiterate that this disparity still exists. Given our view that the long-term health and prosperity of those players operating in the network core is absolutely dependent on the increases in network access speeds enabled by players on the network edge, we are not sure why this discontinuity in share price performance has sustained itself over time. We continue to suspect that one driver may be the relative maturity of the investment themes surrounding broadband access (despite our view that the rollout remains in its infancy) and the resultant perception of a more competitive or commoditized marketplace. While themes surrounding next-generation optical networking may be a bit fresher, we expect this market to be no less and perhaps even more competitive than the access space over time. While we continue to be positive on the long-term prospects of both areas of the network, we view the current period of negative psychology in the access space as a compelling investment opportunity.

Source:
wrhambrecht.com
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