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Technology Stocks : Ascend Communications (ASND)
ASND 208.52-0.3%12:03 PM EST
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To: gbh who wrote (45938)5/2/1998 11:53:00 PM
From: The Phoenix  Read Replies (2) of 61433
 
Gary,

Well, I agree with you. First of all I think that BAY represents a better fit for LU than ASND. Product overlap is nearly non-existent and BAY has next generation layer 3 switches. Also, BAY is 1/4 the price of ASND.

If LU purchases ASND it will be more for immediate account control than for products since, although ASND has some great platforms, they are fairly narrowly targeted, so $10B better also buy some great accounts. I'd also be concerned about ASND keeping their great engineers since given the number of employees and ASND/LU would have it will be hard to create option value for these Silicon Valley based engineers and you know as well as I that there are plenty of startups looking for great people.

I think an alternative would be an ASND/BAY merger, but that makes most ASND longs have dry heaves...even so, I think it would be a powerful combination. 3Com is out of the picture in my mind. I think they have Intel to deal with right now. To be honest I don't understand why Benhamou (sp?) doens't want to take his product line "upstream"..but he seems to content to fight out the "widget wars".

So, as you stated I think ASND will need to fill out their product line through acquistions in order to continue being a premier organization into the 20th century. I think opportunities for ASND to "get bought" are drying up. If not LU then it's going to have to be a telecom manufacturer which would be death for ASND in my estimation.

OG
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