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Technology Stocks : Newbridge Networks

NN 11.97

+5.3%

Nov 21 9:30 AM EST

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To: Andrew who wrote (5145)	6/13/1998 10:57:00 PM
From: Doug	Read Replies (2) of 18016

Andrew: I must first thank you for your response to my questions. Unfortunately, your analysis lacks any concrete numbers regarding projected Earnings and Revenue. You have termed the MCI/BT wins as massive. That kind of terminology is open to any interpretation. It would be more professional if you would state the estimated size of the contract and its duration. This is even more important since the required additional revenue to move a Company with $1.6b annual sales to the next level is now in millions. If NN was so sure of its ability to ramp up its revenue internally, why was it necessary for them to buy U.B Networks. Since this question remains unanswered , I submit that the likely reason for this buy out was that the ramp up of revenue by external acquisition was more certain than other alternatives and an absolute necessity. It was the inability of NN to achieve the desired revenue/income from the U.B acquisition that caused the Investment community to re-asses the valuation of the Company. It would seem logical that for NN to re-establish the old levels of valuation, it will need to display to the new Investor how it is going to ramp up its revenue. New Investors will want more than hope and trust. You seem to be of the opinion that NN will continue on its growth trajectory entirely on its own steam. The technical concerns you express will certainly affect the entire ATM sector. I do not believe that they affect NN exclusively. The Market and Investor are more concerned about NN's ability to show revenue and Income growth from any source ATM,Gigabit Ethernet, Wireless ATM or any other related technology including Maintenance Software.

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