Maverick,
Thank you for your exceptional analysis (as usual). The employee stock option repricing is indeed significant. As you had mentioned some time ago, look for stock option repricing as management's indication of a bottom. Now we have it.
I further agree that if ASND is being shopped (and I think it is), it obviously would take some time. The expectation of an announcement on any given day is too simplistic. I'm aware of M&A situations (euphamistically called "strategic partner relationships") in other industries where, even after it is announced that a company is seeking a partner or shopping itself, the actual inking of the deal can take months. Presumably, ASND management would want to interest several potential buyers, meaning that negotiations would have to be entertained among each of these buyers. There is also the issue of what role existing ASND management (e.g. Mr. Ejabat) would get in any new combination. Furthermore, there is the issue of straigtening up any loose ends, such as management golden parachute contracts, some of which may not be in place just yet. All of these, and more, are issues pointed out by Sector Investor so ably in his prior post.
All in all, this is going to be a process that may well take some time (measured in weeks to a few months), so patience it seems would be rewarded. I would not be surprised to see an announcement, at some point, that the company is in talks with strategic partners (a danger to the shorts), but that no final candidate has emerged.
As for Lucent as a partner (and it should be considered a candidate along with most others mentioned on this thread) the pooling-of-interests issue should not pose a problem since an agreement in principal can be reached well before a deal is deemed "final."
Fundamentally, of course, I think ASND is sound. I think a merger is positive, however, because the consolidation between voice/data puts ASND right in the center of some existing players who have tremendous strength in the industry (e.g. Nortel).
I do have an inkling that, to some degree, management may be trying to temper the stock price for the time being (recall the tepid cc) so that the margin it can get on a buy-out is not too slim. At the least, management may not be terribly interested in hyping the stock as it has (some say) done in the past. I say this because management knows, as do we, that ASND will fetch only so much (you had suggested 8 times $300M revenue). The higher the share price before a deal is announced, the lower the margin, and the more tenuous would become shareholder approval.
Anyway, Maverick, thank you once again for your insights.
Gary Korn |
