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Technology Stocks : Ascend Communications (ASND)
ASND 217.50+1.1%Jan 14 3:59 PM EST
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To: sepku who wrote (21353)11/5/1997 8:45:00 PM
From: Tony Dang  Read Replies (1) of 61433
 
>>>Those price cuts are LIST prices, not street prices which have been falling in RAS for the past few quarters already. The list prices haven't caught up with the street prices yet to figure in how much they've really been discounted.<<<

If only street prices count, why make the announcement about LIST prices if they are meaningless?

>>> Also, the price cuts to street prices will only be 10% for the first half of 1998.<<<

Where did you read that? The announcement clearly stated, "by 20 to 30 percent in the next few quarters." But I'll give you the benefit of the doubt and say you're right. Okay, so buyers will only save ten percent by waiting a quarter. Ten percent on a million dollar order is still a lotta bucks. Gotta be worth a good size bonus.

>>> Margins have been 65%. This is expected to fall to 62% at worst case, and 64% in best case.<<<

This sounds good in '98. But if revenue SHOULD fall next quarter, they better be ready to realize higher margins to compensate otherwise earnings will drop.

>>>ASND will compensate to the RAS price cuts through trimming expenses and restructuring the discount levels for large clients.<<<

I thought they've been cutting expenses for the last couple of quarters. Gotta be getting close to the bone. And by the way, how does discounts to large clients not affect the aforementioned margins?

Still bewildered and stunned. TD
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