Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 210.50

+0.5%

Nov 21 9:30 AM EST

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To: hitesh puri who wrote (58509)	1/8/1999 1:38:00 PM
From: Souze	Read Replies (1) of 61433

Hitesh, I'll take a stab at answering your question, even though financials aren't my area. Maybe it will prompt someone else to jump in with input. As i said, I'm interested in the answer too. I don't think the one time increase will affect the chances of LU buying out ASND. But, to the extent that the accounting change affects future earnings, I think that it will. I think the buyout price will be evaluated by ratioing the two companies' projected earnings over some fixed period and then adding a buyout premium. So, assuming that to be the case, the higher LU's projected earnings, the less they would have to pay for ASND. When Ascend bought Cascade, the deal included a clause on both sides that stock price changes would not affect the deal. If Ascend management felt that way when buying, I expect they would look at things that way when being bought. It is for that reason that I don't think LU's stock price has much relevance. But their earnings, yes, I think that does. Anyone else?

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