hey guys i got quoted by the dow jones newswires today.
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. To: +Hisham A. Mageed (58744 )
From: +Hisham A. Mageed Tuesday, Jan 12 1999 12:05AM ET
Reply # of 58745
Some On Msg Brds Wary Of Lucent-Ascend Merger Reports
By JOHANNA BENNETT
Dow Jones Newswires
January 11, 1999
NEW YORK -- It's the deal that investors have been waiting months to hear about.
But reports that Lucent Technologies Inc. (LU) is in talks to buy Ascend Communications Inc. (ASND) - though widely embraced on Internet message boards and supported by bearish stock prices and options trading - was being downplayed by some online investors with a more cynical attitude.
"Just a little warning to the thread," said one participant on Silicon Investor. "If, and I'm if, LU comes out and says they are not in talks to buy asnd, we will be in for a large and sudden drop."
Message boards often erupt in enthusiasm over news of a merger, regardless of whether it has been confirmed. The result, usually, is rows of messages that speculate about bid prices, reiterate the latest news wire headlines and trumpet the good fortune of those with long positions.
A deal between Lucent and Ascend, which was reported Monday by the Financial Times, has been the topic of speculation for months. Meanwhile, Ascend's stock price was rising Monday amidst heavy trading volume, and option activity also was heavy, as traders scrambled to buy Ascend calls at any price.
But some participants on financial message boards remembered the seesaw ride experienced by Bay Network shares during the months of speculation over its merger with Northern Telecom Ltd. (NT).
Shares of Ascend closed Monday at 76 11/16, up 5 1/4, or 7.3% on a trading volume of 17.6 million shares. The stock, which was priced in the high 20s a year ago, has been rising fairly steadily throughout the past year.
For others, the potential profits of a merger announcement were outweighed by a need for caution. One investor seemed convinced it was time to liquidate his position, unwilling to take a risk that the speculation, which was driving up stock prices Monday, could prove false.
"You take an even greater risk by staying in," said "Devil's Advocate," a Silicon Investor participant. "This stock has been rising on takeover rumors for months now. If LU denies the deal, the stock will drop."
- By Johanna Bennett; 201-938-5670
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