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Technology Stocks : Cabletron Systems (CS: NYSE)

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To: WTSherman who wrote (3160)	3/10/1998 3:16:00 PM
From: Vladimir Zelener	Read Replies (1) of 8358

GWM, << This probably belongs on the CPQ thread, but, my feeling is that the DEC situation will overwhelm CPQ management and the reason is the scale of the whole thing.>> If I remember correctly DEC signed contract with CS promising to buy $1.2 bil. networking equipment from CS. I assume this now will become CPQ's obligation. You might be correct that CPQ will be hesitant to buy CS, but it seems to me willingly or not it is CS partner and distributor from the moment of DEC's merger. CPQ's current troubles IMO are in the low profit margins consumer products. In an attempt to resolve them they might decide to shift the investments in their product lines increesing the business orientation of their products (high end computers and servers), which require installation and support of LAN products. If this takes place CS will become the indirect winner.

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