Hi Ausdauer - Maybe the common thread is (1) large OEM customer(s); (2) leading technology and (3) a merger by a large integrator (ie. ALA, LU, NT, CSCO) that wants a presence in US and to establish market share worldwide.
I refer you to some previous posts and then I summarize some recent events that leads this investor to conclude that AFCI is still a good speculative buy. My price target is $18 - $24 in 18 months.
This post by Bill McCullen summarizes some of the larger players, their equipment (under development) and some of their major customers.
The date of this post was January 4, 1999.
Message 7095963
This post by Bill was made January 13, 1999.
Message 7263966
These two posts and Merrill Lynch's report askmerrill.com (which has been updated) provide a good overview of the market, the players and the expected growth for this industry.
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Recent Events:
1) Tuesday March 2 12:52 AM ET - GE Britain Buys Reltec For $2.1 Billion
dailynews.yahoo.com
Note that Bill McCullen listed Reltec as one of the companies that has innovative technology, and had contracts with a major CLEC/RBOC. Merril Lynch also showed in their market report that Reltec (as AFCI) as one of the smaller players. Now AFCI is the only one left that has a sizable market share other than ALA, LU and NT.
2) NationsBanc's analysts states that AFCI is working with SBC, has qualified their product and may be announcing a RBOC contract at the end of March. Message 8069464
3) Finally we hear that AFCI has announced (1) a new VP of Marketing Mr. Welleby and (2) that Gregory Peters, AFC's Vice President of International Operations, has left AFC to pursue other opportunities. A CEO search is still underway too.
It sounds to this investor that IF a merger is accomplished, these key management positions could be filled by a larger Telcom Integrator like ALA, LU, or NT. A foreign company as a buyer would make the most sence to me. Perhaps all that needs to occur before a deal is inked is for AFCI to land a portion of that SBC contract.
I wonder how much money ALA has left? Does AFCI's product work with those Xylan Omni switches? I believe ALA also recently bought the software "switch" company Packet Engines for 315 million. Who knows, they may put all the pieces together so they can better compete with LU and NT.
Time will tell...just trying to connect the dots.
EKS |
