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

To: Doug who wrote (14664)	11/18/1999 11:08:00 AM
From: Rhys Roberts	Read Replies (1) \| Respond to of 18016

Hey Doug I have no idea on ERICY who knows what financial wizardry they will employ if they choose to buy NN. But on you last point I must take a different position. R&D at NN is no weaker (or better) than any other telecommunications company out there. Before being bought out Ascend had delays more numerous and for longer durations than NN has ever had. Cisco had a huge amount of trouble with their aborted (that's a whole other discussion) ATM switches. Really the 1-month delay of their latest switch isn't a huge issue except for the fact that having it now would make a huge difference in analysts' perceptions. We may well be better off waiting 6 months for the new switch and letting NN leapfrog the competition (which this switch promises), suitors may well pay more for a company with top-notch technology shipping. This is that better mousetrap you asked for, unfortunately not overnight but within foreseeable future. You probably read that Ascend owes their market dominance to their lead in NSP's/CLECS. This isn't a new argument Lutz had mentioned in a CC awhile back an initiative to broaden NNs US customer base to include these players. It really comes down to market share. And what did we loose last quarter Talking to my friends at NN they explain it as CLECs/NSP's ordering more than expected (even by LU) this past quarter as more money was freed up after year 2000 upgrades had been completed. NN wasn't there to share in the windfall, yet NN did hold their own in traditional RBOC and overseas markets. US sales haven't necessarily peaked (they may have). Lutz believed right up to the end of the quarter that we had strong US sales (strong for NN that is), then due to cancellations and other unknown acts of god (I don't know the specifics) they dried up. It could be these sales are carried over to this quarter, to bad for Lutz Spectacular for Flynn. Of course it could be cancellations because customers don't trust NN to be around to deliver, I find that argument unlikely with 500 mill or so in the bank. I don't care if NN sets definite goals/targets for each division. If they don't deliver they're screwed and so are we. The company's is now at the wire, if they don't sell fine but there isn't any room for error PERIOD they screw up its a garage sale. If they deliver (possible, sorta) we have a mediocre stock while we buildup the streets confidence (that's Bay ST and Wall St). If they reject selling NN outright god help us all. If they are open to the idea (clearly explaining their position today) we keep all doors open burn no bridges and life precariously goes on. People expecting a deal in the next few days will be sorely disappointed, this will go on for several weeks at least. ERICY will kick tires and have a chat with TM on what it'll take. Hopefully they'll convince him. Rhys