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Technology Stocks : Harmonic Lightwaves (HLIT) -- Ignore unavailable to you. Want to Upgrade?

To: Brian Sullivan who wrote (3014)	10/28/1999 5:33:00 PM
From: Return to Sender	Read Replies (1) \| Respond to of 4134

This has already been a good return to sender. The underlying fundamentals of this deal are just fine but some people panicked and gave me a real nice oversold condition: Harmonic dives on digital deal $1.7 billion paid for unit with $200 million in sales By Deborah Adamson, CBS MarketWatch Last Update: 4:27 PM ET Oct 28, 1999 NewsWatch SUNNYVALE, Calif. (CBS.MW) -- Shares of Harmonic Inc. fell 12 percent on Thursday after the company said it will plunk down $1.7 billion in stock to buy a digital-video business that does about $200 million in annual sales. On Wednesday, the company (HLIT: news, msgs) unveiled plans to buy Divicom, the digital video division of C-Cube Microsystems. But Erika Klauer, an analyst at Deutsche Banc Alex. Brown, said in a research report that Harmonic is buying a division that is worth more than the entire operations of C-Cube (CUBE: news, msgs). Based on Wednesday's closing price of 40 3/8, C-Cube's market capitalization stood at $1.6 billion. As such, she expects the lucrative deal to ratchet up C-Cube's stock price by as much as 50 percent from its Wednesday close. On Thursday, investors bid up shares of C-Cube by 8.5 percent to 43 13/16. Trading volume for the maker of semiconductors that compress digital video signals was 2.93 million, more than four times its 50-day daily average. Harmonic -- which makes products that enable high-speed Internet access, telephony and video-on-demand services -- said its purchase of Divicom is expected to close in March 2000. Harmonic's stock fell 7 3/8 to 52 1/2 on volume of 8.8 million shares, almost eight times its 50-day daily average. The acquisition should add to Harmonic's earnings in the first year, excluding goodwill charges. Amortization of goodwill will continue to affect profits over five years, the company said. Before the merger closes, Milpitas, Calif.-based C-Cube will spin off or sell its semiconductor business -- essentially separating it to become an independent company. The digital video business will remain and merged into Harmonic. C-Cube bought Divicom in 1996. After Divicom's sale, Klauer values C-Cube's remaining business at $600 million. Despite the high price tag for Divicom, Harmonic's buy aims to boost its market niche. "Harmonic is strengthening its position for the future," said Seth Spalding, an analyst at CE Unterberg, Towbin. Sunnyvale, Calif.-based Harmonic is buying Divicom to deepen its penetration into the telecommunications, satellite, wireless and other emerging markets, the company said. Divicom's products take analog video signals -- which is what TV and cable sends -- and digitizes it. The resulting digital video gives rise to sharper, better quality pictures and takes up less room, or bandwidth, over networks, said Ed Thompson, vice president of business development at Harmonic. Under the agreement, C-Cube stockholders will exchange one of their shares for 0.5427 of Harmonic stock. cbs.marketwatch.com To whomever out there who sold me your HLIT today, I just wanna say... Thank you, thank you very much.... Elvis, back in Sunnyvale

To: Brian Sullivan who wrote (3014)	10/28/1999 8:49:00 PM
From: Craig Gordon	Read Replies (1) \| Respond to of 4134

After to listening to the Harmonic call(replay) I understand why the analysts are recommending HLIT. They were always very positive and did an excellent job of communicating the situation in a very professional way. Tom Lookbaugh did great. They all worked great as a team. I don't know if HLIT is worth its price because I haven't studied the stock. However, I can understand why so many analysts cover it and like it. I like them after 1 call and I don't even know them. They seemed to give all the facts, unlike the Cube mgt. who have consistently made the error of omission. Misleading investors by witholding critically important facts.