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Technology Stocks : Ascend Communications (ASND)
ASND 210.50+0.6%3:59 PM EST
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To: Gary Korn who wrote (26622)12/6/1997 2:53:00 PM
From: blankmind  Read Replies (2) of 61433
 
time to revisit dilution (part 3).

but how what happens when two companies from different sectors combine, will there be price dilution?

1. currently lu is mentioned so lets evaluate them first. will the street perceive this as a move that will bolster sales and bring new products faster. so instead of being dilutive, new markets would be reached, sales would be pegged as being higher,... and now asnd appears cheap because they become a threat to csco with the new muscle. so lu's stock would not decline, but may rise.

2. if csco purchased asnd. because csco and asnd have many overlapping products, my bet it would be price dilutive. even though csco would be even more dominant, the acquistion and merging costs would be higher. although it is possible it will ot be viewed as price dilutive because of csco's current p/e and growth, combining it with asnd's decisively lesser p/e.

thoughts?
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