The following is a quote from Forbes ASAP, Feb. 23, 1998 (My comments are inserted in bold):
Long a darling of the networking set, Ascend horribly missed a quarter late last year. Whoops.
[Korn: True, but a "horrible" miss resulted in earnings per share of .20, or some $40MM in net profit]
Could be that its acquisition of Cascade Communications was too much to swallow.
[Korn: Wouldn't just about any thinking person say that the acquisition of CSCC was a g-dsend for 1998?]
Could be much-admired CEO Mory Ejabat is losing his grip as the company expands.
[Korn: Well, there is some criticism to be made for the failure to anticipate and implement the infrastructure required for a $1B company. But that is now water over the dam as a tremendous amount of effort has been put into infrastructure of late. Did anyone realize, for example, that R&D spending for the the first 9 months of 1997 was $155MM, compared to $64MM for the first 9 months of 1996...Indeed, a large new R&D facility has been opened in San Jose, California...furthermore, MIS systems are being put in place for a $3B to $5B company]
Our experts are still hopeful that Ascend can continue to be dynamic with its 62% of all the worldwide Internet ISDN market and its 42% share of the frame-relay market.
[Korn: Have your experts considered the worldwide ATM switching market?]
The challenge? Can they execute? Can they forestall the giants?
[Korn: If your experts would deign to take a look at some of ASND's killer new products, at its technological leadership and at its new, intense focus on reliability, they might get the inkling of an answer]
Gary Korn |
