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Technology Stocks : Ascend Communications (ASND)
ASND 209.02-0.7%Nov 24 3:59 PM EST
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To: blankmind who wrote (24863)11/28/1997 12:30:00 AM
From: swrdfsh  Read Replies (1) of 61433
 
I'm not endorsing current management. I think they've screwed up the company's relationships with the big investors. That's very different from screwing up their relationships with the people internally who make ASND operate day to day. For better or worse it's something Morey has constructed. He and others are the internal glue for the ASND model. I don't think hostile takeovers can work with personality driven enterprises. Morey and management have the "code".

I'm not talking at all about market cap in this regard. I'm talking about the practical operational value of in-place management. If you take over a hotel chain or a bunch of muffler shops, it's one thing. Good hotel managers are almost interchangable. There's not alot of R&D being played out. There isn't alot of cutting edge innovation going on. The vision is pretty straight forward. ASND is a different animal. The management dynamics are more easily disrupted with deep consequences for the organization.

Hostile takeovers only work in mature industries.

Reverse your question. I don't think there is a buyer. And there's no buyer because management questions make it look too risky.

But to pursue the hypothetical of a hostile attempt, I think the point is that it wouldn't be successful for less than $50, because management would be fighting it (by definition). If someone bid it up to $50 and alienated management, they would be nuts! What value would they get? The spoils don't add up like hotels and muffler shops.

I agree that there will be additional cosolidation in the industry. But it won't happen to ASND. Not any time soon anyway.

swrdfsh
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