Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: zbyslaw owczarczyk who wrote (15036)	11/24/1999 1:24:00 AM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 18016

ZO: Value of NN stock. From YHOO boards. messages.yahoo.com ÿ 11/23/1999 9:03 pm ESTÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Msg: 12538 of 12554 ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ $ value of NN-part 1ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ÿby: fi99_2000ÿ ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ÿAfter reading numerous posts it became apparent what is missing is a financial/analytical approach to arrive at what NN is truly worth to an acquiring company.ÿ The acquiring company is not buying NN for its brilliant sales force or their terrificÿ ÿmarketing capabilities.ÿ What they are buying is the following: ÿ* 36170 - the industry leadng multiservice switch. Installed at 350 service providers ÿÿÿÿ worldwide. The Yankee group predicts a 36%ÿ compound growth rate with a marketÿ ÿÿÿÿ size ofÿ $7 billion in annual sales by 2003 for this type of switch. ÿ* 350 IVSN - the industry first multiservices ATM based access mode thatÿ ÿÿÿÿ supports voice and data services and also future IP-based ÿÿÿÿÿ services through a mix of narrowband and broadband access solutions. ÿLMDS - NN early pioneer and currently winning 50% of all contracts.ÿ ÿÿÿ The Only company with fast TDMA capabilities. ÿ 3dSL - delivers integrated voice, broadcast video and internet accessÿ ÿÿÿÿ services to customers over existing copper infrastructures.This ÿÿÿ ground breaking technology costs only $20 more per port than the ÿÿÿÿ simple ADSL product from ALCATEL. ÿ* ATM based class 4 replacement switches running with SS7 software. ÿ* carrier class IP edge routers from the NORTH CHURCH acquisition. ÿ* IPsec security products from the TIME STEP acquisition. ÿ* the best network managemnt capabilities in the market place.ÿ ÿÿÿ Used exclusively by ATT to n manage their global GSMP network which ÿÿÿ manages networks for some of the biggest companies in the world.ÿ VALUE of NN-part 2ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Msg: 12539 of 12554ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ÿhttp://messages.yahoo.com/bbs?action=m&board=4687030&tid=nn&sid=4687030&mid=12539ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ÿ* soon to have a 50 gig switch and a 450 gig switch by mid 2000. ÿConsider that Fore went for $5 billion without anywhere near the productÿ ÿ offering of NN and only had a 40 gig switch. Therefore, you ÿhave to start at $5 billion and adjust for all of the state-of-art productsÿ outlined and the significantly larger installed base of teleco ÿcustomers around the world. A premium of 40% is both reasonable and conservative. The price becomes $7 billion. Now what about the ÿTDM revenue? About $500 million annual revenue of high margin business.ÿ The TDM business could be kept or sold for $1.5 billion ÿmuch like the Stanford deal was structured. This raises the buyout price $8.5 billion.ÿ At this point you have to consider the affiliates. When ÿIRONBRIDGE goes public through an IPO and if it is half as successfulÿ as Juniper was the 40% stake NN has can generate $2 billion. The ÿtotal now is $10.5 billion. However NN also has about a dozen moreÿ state of the art affiliates like Imagic, Pixstream, Fast Lane, Space ÿbridge, Starvision, Telexis, Bridgewater, Ubiquity, etc.ÿ No one can dispute the fact NN has realized significant gains in the past from the ÿsale of affiliates such as BNI, ACC, Cambrian, and Vienna.ÿ It would be reasonable to assign another $1 billion for the rest of the affiliates. ÿÿÿÿÿÿ VALUE of Nn-part 3ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Msg: 12542 of 12554 ÿ messages.yahoo.com; ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ÿThe total fair buyout price is $11.5 billion. Divided by 184 million sharesÿ ÿ is about $62.50ÿÿÿ per share. Since there is more than one interested buyerÿ ÿÿ a 10% premium should be added and the per share price becomes $68.75.ÿ ÿÿ NN hasÿÿ about $300 million in cash or about a $1.60 per share whichÿ ÿÿ should also be added raising the price to $70.35 per share for the buyout. ÿÿ Before the critics on this board start laughing consider the following: ÿ* 5% of NN's shares were probably purchased already at the $17 range ÿÿÿÿÿ (9.2 million shares)at a total cost of about $156 million.ÿ ÿÿÿÿÿ The restÿ of the shares will cost about $12.3 billion, total cost $12.456 billion. ÿÿÿÿÿÿ However, if the acquiring company sells parts of NN in the same ÿÿÿÿÿÿ way as the Stanford acquisition the net cost is reduced as follows: ÿÿÿÿÿÿ cash used to acquire Newbridge $12.456 billion ÿless Newbridge's cash - .300 ÿless sale of TDM business -1.500ÿ ÿless cash from Ironbridge IPO -2.000 ÿless cash sale of affiliates -1.000 ÿ------- ÿNet Purchase Price $7.656 billion ÿ------- ÿDivided by 184 million shares the net is $41.60 ÿper share. ÿThere isn't a U.S. networking company that comes close to the success NNÿ has enjoyed in Europe and Asia so there wouldn't be an overlap ÿin markets. It seems to me considering the products and successful market regions ÿÿ it would be a match made in heaven for some U.S. networking company. ÿÿÿ The motto remains hang tight and don't give up your shares for peanuts.ÿ ÿÿÿÿ