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Technology Stocks : Cascade Communications (CSCC)
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To: Timothy R. Mills who wrote (3674)6/10/1997 3:43:00 PM
From: Sam Citron   of 3743
 
Here's what is spooking the stock today. According to Briefings at

12:25 ET:

"ASCEND COMMUNICATIONS (ASND) 42 7/16 -5 3/16. Investors are flooding market
makers with sell orders after a brokerage firm's comments suggested that the company may be
taking a few steps in the wrong direction; at least in terms of near-term shareholder
value. These cautious views have sent the stock to the top of the Nasdaq Most Active list, with
over 13.5 million shares changing hands. This figure compares to the 6.35 million shares crossed
of Tele-Communications Inc (TCOMA 16 13/16 +3/4) to put it 2nd on the Most Active list. This
morning's initial downgrade of Ascend shares was made by UBS Securities analyst Nikos
Theodosopoulos, who lowered his rating to "hold" from "buy." Mr. Theodosopoulos is
concerned that the company may be faced with a material financial obligation related to its
plan to offer free customer upgrades to workable 56k modem cards for the MAX and
TNT units and the extended duration of the product fix of the modem cards. Investors'
reaction to the comments forced SoundView Financial to step in to curtail its losses and to prove
that it was also on top of the situation. Analyst Michael Karfopoulos lowered his short-term
opinion to "hold" from "buy," while also cutting fiscal 1997 estimates by 12 cents to
$1.57 per share. That 7.6% adjustment was accompanied by a 3.4% reduction in fiscal 1998
views to $1.97 a share from $2.04. In spite of the near-term uncertainty, both of the analysts
continue to be constructive on the company's long-term prospects, as SoundView maintains its
long-term "buy" rating and UBS touts strong demand for the remote access and new GRF product
line. Moreover, the UBS analyst said he would review his rating given a better understanding of
the potential liability of the free upgrades or after reviewing positive 2nd qtr results."
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