As I understand, ASND was in trouble because of the product problem. In your opinion, what is the problem with PairGain?
Richard,
ASND's problem was the fall-off of ISP revenue from RAS/RAC, which had been ASND's primary market. The opportunity in ASND was ATM (due to CSCC).
In December, 1997, the market did not fully realize that ASND would be a player in ATM. I learned about this opportunity by going to a conference, where I met the CEO and CFO and gained a better appreciation of the direction in which ASND was heading. I recall the focus on CLECs, which has turned out to have been 100% right-on.
So, my opinion on what is the problem with PAIR: The issue is PAIR's market, and whether there is anything to counter the pricing pressures that PAIR is experiencing in its core DSL product:
1. Like ASND with RAS/RAC, PAIR is getting pressured on DSL pricing, both because there are competitors and because other products (e.g., SDSL) are hitting the market. Similar factors hurt ASND's stock price, and they are now hurting PAIR.
2. ASND found a new product, ATM, that it could use to ramp up revenues and earnings. It was a killer product that the CLECs needed for bandwidth deployment. I need to know where PAIR is going with its own products (products that I, admittedly, do not well enough understand; information that other people on this thread can supply) to determine whether PAIR has any possibility to ramp up its revenues and to survive pricing pressures. I called management yesterday, but did not make a connection. I will keep trying.
Gary Korn |
