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Technology Stocks : Ascend Communications (ASND)
ASND 210.62+0.3%2:00 PM EST
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To: Pullin-GS who wrote (12705)9/15/1997 1:55:00 PM
From: Scott   of 61433
 
Research comments today major firm

-ASND has been very weak as investors are concerned that the company,
which has a very backend loaded quarter and is waiting for approvals
for certain products to be sold in Europe, is likely to pre-release.
The fear is that they will pre-release tomorrow - before they speak at an investor conference. The stock has been very weak.

-The issues are the following:

1) The quarter is back end loaded. This is true. The company has stated this from the start.

2) The quarter got off to a slow start. We feel this is understandable. As the companies had just merged, they needed to go through cross training of salesforces etc. However the company still expected to make a strong finish.

3) There was a Cowen story out recently that claimed Cisco was
incentivising their salesforce to price aggressively and gain market share at any cost. We feel very strongly that this is not the case as it is not characteristic of any of Ciscos actions in the past.

4) Now there is a theory that as long as the company is struggling to
make the quarter, why not pre-release showing poor numbers and then show much better numbers going forward .

5) To compound all this, several weeks ago the CFO, who was very
well liked by investors, announced he will be retiring and the
company has not yet found a replacement.

Overall it is hard to say how much weaker the stock will get. Going
in to tomorrow's meeting, it would seem all the bad news is expected.
Thus if the company does not pre-release tonight, we would expect to
see a rebound.
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