Yahoo thread post on LU/ASND strategic fit
messages.yahoo.com@m2.yahoo.com
Message 15468 of 15478
Reply
Long_on_Tech, ASND/LU
musings
mcammarata
(28/M/Toms River, NJ)
May 25 1998
5:13PM EDT
L_o_T,
To answer your 3 questions "What is your take on the Yurie-Ascend overlap? Does
it still make sense for Lucent to aquire ASND? Did it make sense for Lucent to
aquire Yurie if they were planning later to aquire ASND?"""""
I think the answers are 1)Not a problem, 2) Yes, 3) Yes.
There is moderate overlap between Ascend SA family and Yurie, but you have to
look at this in a more revealing light. October is 4 months away at this point. The
Lucent execs know that they would like to acquire ASND, along with Qualcomm or
Nokia. The issues here revolve around what might happen and what might be
possible. From the Lucent guys perspective, there is no guarantee that ASND will be
available come 10/98. There is a distinct fear that someone like NT or ERICY may
use time to their advantage and take out ASND at any moment for a market moving
premium like 60 or northwards. NT or ERICY can't wait for October to come, that
would invite LU to step into the fray much as Worldcom did with MCI. Therefore,
LU can't ride it's entire strategy on ASND being available for sale in October. That
pushes it to make realistic, doable deals that are achievable today with the available
players. This has lead to the purchase of Prominet, Livingston, and Yurie. If ASND
is gone or unavailable when October comes then LU will work with what it was able
to put together. If overlap exists, it will be a small price to pay for strategically
positioning yourself for whatever the future brings. Consider Yurie and Livingston as
insurance policies. Alternatively, what if October comes along and various factors
make an ASND acquisition untenable to LU shareholders, like a frothy price in the
70-80 range which would make the buyout around 90-100. This would be a tough
decision for the shareholders of LU to sign off on. Also, maybe September talks
between Mory and LU break down over strategic disagreements or the like. For
LU, there is no guarantee, therefore it was forced to do what could be done thus far.
For ASND, there is nothing but upside, resulting from having the right products at the
right stages in the right markets. People just don't care that much about upgrading
their LAN's today, that's not the bottleneck. Upgrading the WAN's are the big story
and there is no amount of bandwidth yet available that can satisfy every Net hungry
consumer out there. Therefore, BAY, COMS, and CS share prices just fritter away
while ASND, CSCO, TLAB and the like shoot skyward on real order growth to
buildout the telcomm and data networks of the future. I believe this answers your
questions
Later
Mike Cammarata
ASND: Quote | Profile | Research
This Is a Reply to: Msg 15465 by
Long_on_tech
View Replies to this Message
<- Previous
Next ->
Message 15468 of 15478
Reply
Terms and Conditions
Yahoo! is a trademark of Yahoo! Inc.
Copyright c 1994-98 Yahoo! All Rights Reserved. |
