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Technology Stocks : USRX
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To: damniseedemons who wrote (13637)2/26/1997 11:46:00 PM
From: Fred Fahmy   of 18024
 
Sal,

<< For the short term, you got lucky with the merger news. I don't see how you can even argue about this.>>

In the short term the stock was rebounding and would have continued to do so on its own. X2 was going to drive USRX up nicely all by itself. Every time progress was made with a ISP's testing and or a new ISP coming on line there would have been another news release pushing up the price. Every future delay of the ROK/MOT (and there will be plenty) would have also driven the stock up. USRX was clearly, by any indications, close to a bottom. The stock had already retreated below where it was 12 months ago. In other words after an amazing twevle months of financial performance the stock was trading less despite not once missing earnings. I can't think of a stock that was more ripe for a sudden turn around and X2 was more than a sufficient catalyst to keep things going up.

<<By the way, I'm interested to hear your take on the merger: Would you have preferred USRX to stay independant? Do you think it would have done better over the long-haul as a single entity?>>

This is a very interesting question which requires a lot of thought. Since I have not followed 3COM nearly as close as USRX it is hard for me to judge. I think USRX's growth rate over the next 5 years would have been higher on its own but that there are many potential positives from the deal. From a long term perspective I would have been very content to see USRX continue on its own. I believe the future of this new entity holds much potential but brings along more uncertainty than if USRX would have remained independant.

FF
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