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Technology Stocks : Ascend Communications (ASND)
ASND 212.33+1.1%Nov 28 9:30 AM EST
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To: Tech97 who wrote (26774)12/7/1997 1:24:00 AM
From: Gary Korn  Read Replies (4) of 61433
 
I believe ASND has not announced a stock buy back program yet because they are prohibited from doing so until six months after the consummation of the Cascade merger. The SEC recently came out with Staff Accounting Bulletin No. 96 (March 97) that prohibits large acquisition of treasury shares following a pooling transaction until six months later. I wouldn't be surprised of an annoucement by ASND in Q1 98 if the price stays at this level as it would reduce the dilutive effect of the Cascade merger.

Tech97,

Thank you very much for the above. It is exceedingly useful information:

1. It explains why ASND didn't do anything in the fall and winter as the stock price dwindled. I had inferred from the lack of a buy-back that ASND did not want to prop up the stock price against a willing suitor (and did not want to narrow the margin between stock price and offer). But the far more logical reason is the one you posted.

2. Impending expiration of the 6 month period (would that be at the end of December?) suddently creates a new sword of damocles to hang over the shorts: along with the fear of good earnings, new contracts and the prospect of an ASND that is "in play" may be the new fear of a buy-back announcement. This, then, just becomes another force behind momentum on the upside.

Gary Korn
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