Blankmind:from DJ in its entirety
June 11, 1998
Bay Buyout Rumors On Web Frustrate
Those Awaiting News
By JOHANNA BENNETT
Dow Jones Newswires
NEW YORK -- Monday was a disappointment for "Hsb."
Rumors on one Internet message board told him that Canada's Northern
Telecom Ltd. (NT) had practically announced that it was definitely
buying Bay Networks Inc. (BAY). And when that little tidbit didn't
prove true, no problem. After all, everyone said the big announcement
would hit the tape as soon as the market closed.
It didn't. The rumors continued. And by midnight, "Hsb" appeared to
be running out of patience.
"I'm long on Bay. But this is driving me nuts," read the message he
posted on the Motley Fool's Bay Networks message board.
"Hsb" isn't alone.
Frustrated investors have been peppering Internet message boards with
similar sentiments over the last week, expressing their annoyance and
frustration that the rumored takeout of Bay Networks - that was once
driving stock prices higher and higher - has not panned out.
"Bay still has investors on pins and needles," said "Blankmind," a
participant on the Silicon Investor, a popular on-line financial site.
Struggling to compete with Cisco Systems Inc. (CSCO), the undisputed
leader in the computer networking sector, Bay Networks has
periodically been the topic of consolidation rumors for the past two
years. Those whispers began anew when the company posted a
disappointing March quarter and heated up about a month ago, linking
the company's name with firms such as Northern Telcom, Lucent
Technologies Inc. (LU), Alcatel Alsthom (ALA), Ericsson Telephone
Co. (ERICY) and Siemens AG.
And of course when rumors fly, they often end up on Internet chat
rooms and message boards, popular sites for individual investors. That
can breed frustration for those who hang on every message.
"Are they always this drawn out," asked one Motley Fool message
board participant nicknamed "Km100." "I though they happen like a
thief in the night usually? (Is today the day)."
Unfortunately, those on-line whispers don't always speak the truth.
And if they do, it could take months before anyone announces a deal,
creating heightened anticipation that drives some a little batty.
"I wouldn't hold my breath," Martin Pyyllonen, an analyst with CIBC
Oppenheimer, told Dow Jones.
"Although these rumors have been around for weeks, I haven't been
spending a lot of time, at least not until something actually happens,"
said Pyyllonen.
Never mind the fact that it's never been officially confirmed that Bay
will be bought and that most of the speculation has been bolstered by
stock prices and options activity. Never mind that Bay Networks is an
easy magnet for rumors, considering common knowledge has it that the
networking sector is consolidating and the larger telecommunications
companies must make a play for networking companies.
Meanwhile, some of the potential marriage candidates have either
announced other deals or appear to be looking for smaller companies.
And of course, Bay Networks' stock price fell off this week, much to
everyone's dismay.
Suddenly some Internet stock pundits don't find all those rumor
postings quite so helpful anymore.
"This board is bulging with messages from everyone and their brother,
relatives, barbers, shoe shine boys, all knowing exactly when Bay
would be taken out and for how much," complained one Yahoo Finance
message board participant.
"Two posts from now someone will 'state ' they heard a rumor ... Well
duh!" wrote another.
But the rumors mill keeps turning. Speculation continues. And many
still can't help but ask the question of the day: "Do you think today will
be the day?"
-Johanna Bennett; 201-938-5670
Briefing Book for: ALA | BAY | BCE | CSCO | ERICY | F.ALA | G.SIE | LU | NT |
T.BCE | T.NTL
Format for printing
Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved. |
