Direct from Dow Jones:
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November 18, 1998
Newbridge Stk Up: Major Pact With Global One Rumored
By BEN DUMMETT
Dow Jones Newswires
TORONTO -- Newbridge Networks Corp.'s (NN) stock is up significantly, and there is a rumor circulating that the company has won a major contract from the Global One telecommunications partnership.
One analyst, who asked not to be identified, said the Newbridge pact with Global One is rumored to be worth up to US$750 million, for the supply of Newbridge's asynchronous transfer mode, or ATM, equipment. The analyst said the contract was confirmed by a source at Global One, but cautioned that the pact still might not be certain. The analyst also couldn't give the contract's duration.
The Global One partners are Sprint Corp. (FON), France Telecom (FTE) and Deutsche Telekom AG (DT).
A spokeswoman for Global One declined comment, and no one was immediately available for comment at Newbridge.
The only public announcement from Newbridge Wednesday involves an equipment order from a Colombian telecommunications company, Teletulua Telecom, for an undisclosed amount.
It should also be noted that Newbridge is expected to report its latest earnings results next Tuesday. This stock, like many other technology issues, has on occasion posted significant gains ahead of its earnings releases.
In Toronto, Newbridge is up 2.85 at 36.35 and in New York, it has gained 1 3/4 at 23 7/16.
Andy Schopick, an analyst at U.S.-based Nutmeg Securites Ltd., cautioned that even if Newbridge Networks Corp. (NN) has signed a big deal with Global One, the value being placed on the rumored deal could turn out to be misleading.
He noted that the contract value is an estimate, based on a certain pricing and other terms and conditions outlined in the pact, which typically runs several years. However, actual orders made are "subject to orders from the purchaser at his schedule and his desire," Schopick said.
And "unfortunately, the history with Newbridge is that (it has) overestimated the value of most of (its) big deals," Schopick said.
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It takes a lot of crust to put out a rumor listing numbers and then fault the company for hyping the very numbers you've supplied.
I guess I shouldn't complain. Mr. Schopick's just getting us ready for MacLellan.
Later ---
Pat |
