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

To: akmike who wrote (14108)	10/30/1999 1:25:00 PM
From: Ian@SI	Respond to of 18016

Why would major buying commence with the stock in a free-fall? We just finished the major window dressing season for mutual funds. First the fund managers shed their losers, of which NN would certainly be one, so that they look like geniuses with only winners for their unitholders to see in the annual reports. Second, they are able to offset any capital gains with capital losses as some, not many, but some are paying a little more attention to the tax consequences for their unitholders. I'd expect the funds to resume building up their positions starting Monday. Others will wait until we get past the earnings warning week. Still others will await the next earnings conference call. But if we haven't already seen the bottom, I'd guess we're less than a week from it. JMHO, Ian.

To: akmike who wrote (14108)	10/30/1999 4:20:00 PM
From: gbh	Respond to of 18016

Why would major buying commence with the stock in a free-fall? Because I think the last 3 days have actually been a basing period of sorts. The stock seems to have bottomed coincident with end the fiscal year of most mutual funds. After the selling abates and the pre-announcement period has passed, we will see if there are buyers around. Buyers have already asserted themselves over the last three days, at roughly the 19 level. The real question is, will the selling really stop here? I think if the selling continues into the next few days, it will be indicative of a missed quarter. The "real" buying won't likely commence until after the earnings release in a few weeks. The institutional buyers are rarely early. They will give up a few points for the relative safety a strong quarter, and CC. And don't forget. These guys can "manipulate" to get the price down if things future does indeed appear to be bright. As to the balance sheet issues, they are related to the production cycle woes and the key here in my view is whether we have continued to move in the right direction this quarter. The only balance sheet issue related to production was inventory. And this grew too much for my liking to be simply explained away as a temporary fix. In any event, DSOs and AR are another issue entirely. These will be much more closely scrutinized this quarter. Gary