BAY Ntwks (under House) Message Board

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Technology Stocks : BAY Ntwks (under House)

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To: david jung who wrote (6599)	6/17/1998 1:52:00 PM
From: Nevin S.	of 6980

David, please don't take these comments personally I just want to get some thoughts on the table regarding the article you posted. I have a problem reconciling Mark Lucey's view of Nortel when his own analysis indicates that the Bay acquisition will be probably be accretive to NT's earnings (see below) . His statement regarding the merger "would be difficult for the deal to be slightly accretive to Nortel in 1999" (see below) is one of the more amazing pronouncements I have seen. Either he believes that it will be difficult for the acquisition to be accretive or he doesn't, but to be difficult to be "slightly accretive" seems like a hedge to me so that no matter what happens he can say that he was right on the money. But when you clear through the smoke, it looks like he reluctantly admits that the acquisition will ultimately be accretive to NT. The second problem I have is he makes no comment on NT's ability to compete long term without a presence in the data networking market. NT has been great in bringing voice products to market but what about the even faster growing segment of data transmission. Mr. Lucy fails to even discuss the prospects for NT without data networking and how that will impact future results. Most analysts have been quick to retort that "Bay never stood a chance as a stand alone business" but what about companies like NT without data products. >>Kearns Capital analyst Mark Lucey cut Nortel's rating to ''reduce'' from ''long term hold'' on Tuesday, despite the stock's two-day tumble of C$15.10.<< >>After crunching the numbers, Lucey also noted it would be difficult for the deal to be slightly accretive to Nortel in 1999, as the company predicts. <<

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