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

To: pat mudge who wrote (14315)	11/3/1999 9:50:00 PM
From: gbh	Read Replies (2) \| Respond to of 18016

Pat, great post. I'll leave it at that. Good luck. Gary

To: pat mudge who wrote (14315)	11/3/1999 10:28:00 PM
From: EdR	Read Replies (1) \| Respond to of 18016

Pat - 'Don't sugarcoat it, why don't you say it like it is?' :) I admire you for your ability to say how you feel.... Ed...

To: pat mudge who wrote (14315)	11/4/1999 8:29:00 AM
From: Peppe	Respond to of 18016

Pat, My only regret is that anyone might have lost money because I believed Newbridge could be great. For that I deeply apologize. Pat, I don't believe your apology is necessary. Given NN's products, the tremendous growth in carrier spending, management changes (Lutz being brought in, TM's buddies fired, etc.) you weren't the only one fooled. If you're guilty of anything, it's being too attached to your investment and belief in NN. Sometimes the most important lessons learned are from our most painful mistakes. I really respect your insight and your detailed research and I hope this experience doesn't keep you from continuing your contributions to SI. Keep on truckin... Peppe

To: pat mudge who wrote (14315)	11/4/1999 9:09:00 AM
From: Ian@SI	Read Replies (2) \| Respond to of 18016

Pat, Nice epitaph for Alan. He didn't write it, did he? A couple observations: 1. RE Firing the CFO, the board, and any others within range. This sounds an awful lot like CPQ's very unsuccessful approach to fixing its problems. If there are 30 means of improving corporate results, less than 3 of them will lead to firing staff. Using that as a first approach is one of the quickest ways to destroy morale, motivation and results within a company. Alan, 2 conference calls ago, made a couple comments that raised this red flag re his management style. I didn't listen to the tape again but the paraphrase of his statement was along the lines of "If they don't fix it on schedule, I'll fire them". Actually, I can't think of a better way to destroy motivation in a company than instituting a reign of this kind of terror. 2. The company has some fantastic technology --- the 50/320, DSL, LMDS --- and equally fantastic people --- in part (maybe large part) because of Alan's leadership. Pardon me. Which of those products are a result of Alan's leadership? Which weren't already well underway before you'd even heard of Alan Lutz? I'll grant that Alan had some major achievements that will continue to reap dividends for NN going forward. The attention to Sales / Marketing is just one example of such an achievement that probably wouldn't have been made anywhere near this quickly without him. The IP thrust happened during his tenure; thus I have to believe he had some role in NN finally recognizing that it wasn't the rest of the world that was out of step in this particular marching band. Well done, Alan, if you did achieve this objective. That alone, is likely to contribute more to NN's prospects and success than any other technical initiative. Not because of the products themselves so much as the signal it sends to the buyers. 3. Live by the sword, die by the sword. Alan chose to fire / restructure to achieve results. He really shouldn't be surprised to see a similar fate when he didn't achieve the desired results. New CEOs aren't given forever. Usually less than 3 months to show positive signs; and less than 2 years to deliver. I don't know what the agreement was with Terry, but I doubt that the objectives were achieved. 4. A final observation requiring a massive intuitive leap. At the last earnings conference call, Alan advised that the Sales Force would have their commissions from sales cut off 2 weeks prior to the end of the quarter. The objective was to get the orders in in time to deliver product prior to quarter end. I suspect that someone forgot to tell the customers that the rules of the game had changed. Thus customers that had been trained to wait until the last week of the quarter in order to get the maximum discount were disappointed; and a couple very large orders in the US didn't close. I know that when a vendor's salesperson told me that I had only until next Tuesday to get the great rate being offered to me, if next Tuesday didn't meet my schedule, my reaction would tend to be along the lines of "Oh yeah, we'll see about that." I suspect that the sales force ran into a couple accounts that wouldn't move their order commitments up by a couple weeks, then got annoyed when the expected discounts didn't materialize. I wasn't there. So this is all speculation on my part. I do suspect that we're likely to see the US recover sharply because of this order delay. Pearce will look like a genius for a quarter or 2 at least. And yes, NN's stock price will probably recover somewhat. And if some of the very positive initiatives that you've written about so frequently in the past actually happen, yes, NN will see new highs again. But I'd also be equally happy to see the Street take the stock's price down to about $5 Cdn (i.e. in the order of 1/2 cash) so I can sign up for some of that free money. :-) Sorry to hear that your timing wasn't impeccable this time. Usually, you've been able to trade out before the warning and get back in at much lower prices after. It would seem that NN's volatility has served you very well. FWIW, Ian.

To: pat mudge who wrote (14315)	11/4/1999 8:10:00 PM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 18016

pat you don't have to apologize. NN should have hired you as their PR and to run the company's morale dept. and the " how to get things done " dept. Unfortunately I believe that TM has run this co a little like " an Englishman's hobby ", where you spend endless hours in the garden gardening roses oblivious to time and obligations. Obligations such as those to your shareholders not just your birthplace and workplace, hotels, and various other social activities. This is the primary responsibility of the CEO of a publicly traded co . Other people have entrusted him with their hard earned earnings with the understanding of seeing the money grow. TM has not delivered to that account. Unless he moves fast to resolve these issues he will loose his most loyal supporters. I want to take this opportunity to thank you for all the great info you provided this thread and hope that you continue to do so, TA ---------------------------------------- To: len grasso who wrote (14286) From: pat mudge Wednesday, Nov 3 1999 9:31PM ET Reply # of 14315 He presided at Unisys, Compaq and now Newbridge. He did not preside at Unisys nor Compaq and at Newbridge he presided with handcuffs. Unfortunately Alan will be the scapegoat for every fault the company has and those who stay on will perpetrate the myth because of their loyalty to TM. That's okay if it gives comfort, but if the company's destroyed in the process, what's gained? There were mistakes made on both sides but don't forget Alan took over a failing company and was terminated when he didn't turn it around in 18 months. Someone had to take the rap and he was the obvious choice. Terry's a born leader with enormous charisma and he can rally the troops like few others. If I were he, I'd hire a CFO from hell and give him absolute power over everything I did --- including affiliates, personal investments, golf courses, hotels, jets, charitable causes, and every expenditure under the sun. I'd hire this guy's brother to run operations --- with equal powers. And another brother to keep track of orders and sales. Clearly, someone can't count. I've never run a company in my life, so you can take all these suggestions with a grain of salt. But since I'm started, I'll continue. If I were he, I'd invent some way to get honest feedback from my employees. Not praise --- that comes without asking --- but the dirt. It could be done anonymously, but it would be required. There are a lot of Emperors running around without clothes simply because no one has the courage to speak the truth. I'd fire half my board and bring in outsiders with ruthless track records. No yes men. No yes women. Oh, forget the women --- when hell freezes. . . If I were an employee, I'd demand the company regain respect on Wall Street. I'd demand that realistic expectations be set and be met. I don't know how you do this, but there has to be a way to know what the hell's going on before the sky falls in. Were salesmen telling Alan they had XYZ numbers just to make him happy? Were they bringing in orders taken at gunpoint that were later cancelled? Was everyone smoking something????? And going further back, who let the company get so far down the wrong path before they decided all-ATM wasn't the way the world was going? Why didn't someone stop that train before it went so far? Was it hubris? If so, will it happen again? If this were a war, the general in charge would bring out a map and go over the battle step by step. Look, guys, we lost 100 men in that last skirmish. We did this this this and this, and we're not going to do that again. Mistake by painful mistake the analysis would be done. Will TM do that? Will he drag out UB Networks and Research & Development and excesses with affiliates and a long list of other sins and see what can be learned? The company has some fantastic technology --- the 50/320, DSL, LMDS --- and equally fantastic people --- in part (maybe large part) because of Alan's leadership. The company's balance sheet is respectable, the affiliate program has been cleaned up (and a few made accountable for expenses), Asian operations are more efficient, a strategic acquisition has been initiated (and now put in jeopardy), and key managers appointed (some from outside, some from within) who can be credited with many of the improvements. I'm on a roll, so hold on. . . I know there were problems. Rome wasn't built in a day. Estimating earnings and keeping expectations in line was the killer. And there are no excuses that will wash. Terry was never good at it and clearly, Alan wasn't either. But when you stand back and realize how devastating a management shake-up is at this point, you have to wonder if it was the right action. I honestly don't know. I don't think anyone on the outside has enough information to make that call. At this point everything is hindsight. If the quarter had come in on target, the bears would have gone back to their caves and all their prognostications forgotten. As it is, the quarter didn't come in and even if the company should eventually pull its way out, it won't change the present. Right now the longs are wrong. A painful truth. I have lots of unanswered questions. What exactly went wrong? Product transition? Vexatious orders and receivables? Expenses out of line? Missed contracts? And if I were still a shareholder on November 18 I'd ask some hard questions. I'd grill TM on every contract every announced. I'd want to know its status and if it's likely to change. Especially US contracts. I'd be wary of generalizations. I'd want an explanation for the quarter's shortfall and I wouldn't accept easy answers. And, finally, I'd ask TM if Newbridge is his hobby or if it's a public company with shareholders who deserve accountability. I have a lot of respect for Terry and enormous respect for Alan. But I don't respect the actions that resulted in this week's tragedy. My only regret is that anyone might have lost money because I believed Newbridge could be great. For that I deeply apologize. Regards, Pat