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Technology Stocks : Ascend Communications (ASND)
ASND 196.81-4.9%Dec 9 3:59 PM EST
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To: gbh who wrote (48944)6/18/1998 9:06:00 AM
From: tepli  Read Replies (2) of 61433
 
I called my broker in Stockholm (ERICY's home town) and they said it would be very unlikely that Ericsson would buy ASND. Well, who knows but here's some facts about ERICY:

-ERICY trades at 22 times 1999 EPS
-ASND's 99 PE is about 33
-ASND market cap is $10b, sales 1.5b. ERICY market cap is $54b, sales 21b
--> very expensive for Ericsson's shareholders to "pool interests"

-ERICY's cash flow during the Q1 was negative, as usual. That's because they finance their customers. Customers need financing when they buy these huge mobile infrastructure equipment, these deals could be more than $200m a piece.
--> ERICY has no cash to spend on acquisitions.

I doubt it.
Long on ASND.

Regards,
tepli
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