Leuthy et. al, My counterpoint.
Your presentation of information is a good synopsis of reasons why
Ascend *may* descend tommorow but does not really help for a long
term prediction. I believe a more fundamental analysis should be
made with Ascend rather than trying to perform some type of
technical analysis.
1. The router/switch market is a question of
*volume* more than *margins*
It is especially true in the router/switch market
that lower margins can be countered with increased overall volume.
Typically, rounters/switches become defacto industry standards and
eventually buoy a small company, like Ascend, up to the water line
of the larger companies, like Cisco. This requires lowering costs
and increasing volume. High tech companies do this all the time:
Microsoft, Netscape, etc. Fortunately, router/switch companies don't
have to give it away once they establish a large base.
2. Ascend has focussed solutions
Part of the beauty of a smaller growing company is the intense focus that the company must achieve.
Cisco has their fingers in many cookie jars and thus has diluted
their focus (ie Stratacom). While Cisco and others are integrating
switch technology etc., companies like Ascend are improving
their established technology.
3 Wide acceptance in the market place.
Recent announcements in the marketplace indicate that many large
companies, sometimes govt's of the countries, are adopting the Ascend technology. The telephone companies are seeing switches as an
inexpensive way to update their more arcane telephony in the short
haul and in the long term. ISPs around the world see the benefit
of the embedded security in Ascend systems as the Internet commerce
segment of the world wide economy grows and becomes viable. Meanwhile, companies like Cisco, Bay etc. are just beggining to see
the picture. They are still focussed on moving data without any
real value add for the ISPs. True, if the Internet did not exist,
Ascend would have no chance. However, the Internet is here to stay.
Approximately, 17,000 web pages are being added each month to the
WWW according to DigitalGirl.
By the way, all the recent announcements are real announcments of
real business. In one of your posts, you wondered (ie Hmmmm) why
the rash of announcements all of the sudden. These announcements
are not "vapor" announcments or designed to fraud the investor.
That would not be a smart move.
4 SEC disclaimers are good not bad.
Further, I am *glad* the managment has added all the disclaimers in the SEC filings. This is not
only an honest approach, but reduces the likelihood of strike suits,
derivative suits and general ill will. Even though life has no
guarantees, even Ascend stockholders need a reminder now and then.
IMHO, Leland
PS - If you noticed my spin, I _am_ a shareholder. |
