Where did Fool dig up that FOOL, a.k.a. "MF Edible"?
The company seems to agree, since insiders -- including the President -- sold in droves in November. Yes, just as they were saying how they were comfortable with analyst estimates of $3.20-$3.30 a share in 1997 they were also unloading shares on to people willing to pay more than 20 times those projected earnings.
Anyone but a fool can see that the sales were only a fraction of the shares owned by the insiders, including the shares sold by Casey. Most were probably expiring option related and/or were for diversification purposes. What good are stock options if you can't use the proceeds to enhance your lifestyle? These guys deserve to benefit from their labors - which has borne much fruit for the shareholders.
It all boils down to the technology, and US Robotics was not the first to introduce the 56.6 Kbps modem. That honor belonged to Rockwell, who in teaming up with Ascend Communications, places them, and not US Robotics, at the forefront.
It's a 56k, not 56.6k. Rockwell is not "teaming up" with Ascend, but rather, Ascend is at the mercy of Rockwell. The fact is that they are months behind USR in deployment, and will have the burden of a major cost disadvantage compared to USR. If this person thinks Rockwell is at the forefront, s/he must believe in leading from behind.
Even that does not mean much, since modems have come a long way since the day when every budding sysop had to own an external Courier modem to keep their Bulletin Board System running. With internal nameless modems standard in many computer systems now it is well on its way to becoming a commodity segment, as has been the case with RAM chips.
Not true. RAM is RAM. A Rockwell modem only wishes to be a USR modem. Notice all those sysops wanted Courier modems so their BBS would keep running. THose same Courier modems can be software upgraded to 56k for free. Wherefore art thou, Rockwell?
Yes, modems that can download twice as fast should mean another year or two of modem upgrades but where from there?
xDSL.
And how will this behemoth grow sales and earnings when the market moves to cable modems with such superior speed that the perpetual upgrade will cease for awhile?
What? Cable? MFool had better start drug screening.
I don't know and maybe the company does not know either and that is why they are cashing out now while x2 might simply mean XS in the share price.
Riiiight. USR's management doesn't know what's happening in their industry. That's why, even though Rockwell announced 56k first, USR is deploying first. That's also the reason ISPs using USR concentrators are deploying 56k this month, while their competitors like Ascend don't have a 56k port to pee in, or a window to throw it out of.
Pullllleeeeeeeze! |
