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Technology Stocks : BAY Ntwks (under House)
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To: StockMan who wrote (6745)6/24/1998 12:43:00 PM
From: Paul Fine  Read Replies (2) of 6980
 
Stockman-

In reply to my note re the importance of Bay making this quarter's numbers, you said-

"If Bay delivers as promised it should be OKAY. After all Bay's results
are only 20% of the overall NT's results.

The analysts will be looking more into how the merger is being handled
rather than numbers this Quarter."

You made my point in your first sentence. IF "Bay delivers as promised" is the key point I was making. I agree with your conclusion that this is a good thing. I do, however, think you understate the full impact bad numbers would have on NT/Bay stock price by merely looking at the 20% factor. Bad numbers would reinforce the opinion that NT overpaid for a second-rate company and have a disproportionate impact on the price(as we saw when the merger was announced last week).

In that same line, your assessment that analysts will be looking more at how the merger is being handled than at the numbers this quarter confuses me. The merger won't take affect for about 90 days. Therefore, no integration(beyond current partnership-type projects) will be going on for analysts to assess. Do you think the analysts will simply sit on the sidelines until then without gauging the performance of the company? They share the same concerns we have seen in print; that Bay is not out of the woods and NT overpaid. They as much as the NT shareholders want to see if Bay can regain positive momentum in revs and earnings.

Paul
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