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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Tunica Albuginea who wrote (12366)	7/23/1999 12:31:00 PM
From: Rob Riordan	Read Replies (1) \| Respond to of 18016

TA - I am betting with you. My take on this quarter centers around the enormous hole the company would dig for itself if it missed this quarter. Here is what we know: 1) Last conference call Alan gave guidance on this quarter which lowered the bar for this quarter but raised it for the year. 2) Large backlog of unfilled orders from previous quarter which were all shipped in first month of this quarter. 3) An analyst who in the past has been very supportive of NN made some comments to his sales force which were misconstrued, sending the stock price lower. This analyst acknowledged that he thought NN would make the quarter. I think some people are thinking they will not make the quarter. This would be a significant blow to the company and would severly damage any credibility that is left with the investment community. I am sure Alan and Terry know this so they have been guiding expectations lower so that they can make the number even if demand slowed during the quarter. There is just too much to lose if they miss. But lets say they do miss. Seems to me that they become vulnerable to a takeover at levels under the $21 support. Fidelity (if they haven't sold) owns approx 10%. Thats a big chunk of ownership. I'll bet that someone could take a serious run at the company with that 10% out there to counter the stake Terry has. My suspicion is that if this scenario unfolded it would end up being a friendy merger/acquisition at prices higher than we are seeing today. If they make the number, the key will be what they say about their future prospects going forward. Once again, if their technology is as good as we think, and it is their execution that is the problem I would expect a fairly positive outlook and a growing backlog. Stock should recover to higher levels than today. Worse case is they just make the number and still have problems with execution and demand is not growing. I think (hope) this is unlikely. Time will tell. Rob