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

To: Charlie Tuna who wrote (15856)	12/15/1999 4:13:00 PM
From: zbyslaw owczarczyk	Respond to of 18016

Interview with Flynn in fanancial post: nationalpost.com Wednesday, December 15, 1999 Rebuilding credibility job one as Newbridge tries to calm rumours Jill Vardy Financial Post OTTAWA - Newbridge Networks Corp. is scrambling to convince customers that rumours of its imminent sale won't hurt its ability to fill contracts for its telecommunications equipment, the company's new president said yesterday. "Does all this speculation drive me crazy? Absolutely," said Pearse Flynn, Newbridge's president and chief operating officer. "It gets our customers thinking and our employees thinking, and our competitors are trying to take advantage on both fronts." Newbridge closed its purchase of Stanford Telecommunications Inc. yesterday. It has been winning small contracts for its equipment and is restructuring to try and ensure its survival as an independent company, Mr. Flynn said. "We have a go-it-alone plan and that's the way we're going," Mr. Flynn said. "I can't comment on any speculation because I have nothing to comment on." Most analysts expect and hope Newbridge will be sold, despite Mr. Flynn's efforts to ensure its independent survival. "He's clearly been brought in with a role to play -- to rally the troops and find a way to have this work as an independent company. But it's very difficult," said one financial analysts who has covered Newbridge for three years. The analyst, who asked not to be named, gives the company less than a 50% chance of surviving as an independent company. "It doesn't sound logical to me that Newbridge would have hired Morgan Stanley on a whim," the analyst said. Newbridge has hired the U.S. financial house to evaluate any takeover bids and negotiate with potential buyers. It said on Nov. 18 that it is open to all possible options for its future, including bids from larger telecommunications equipment suppliers. Since then, the stock has whipsawed on speculation it would soon be sold. "I'd be telling lies if I said our competitors weren't trying to exploit the fact that our name is in the press every other day with wild speculation. We're having to do a lot of work with our customers to reassure them," added Mr. Flynn, who took the helm after Alan Lutz suddenly resigned on Nov. 2. The company reported second-quarter earnings that were less than half what analysts had expected. The company is working quickly to get its new telecommunications switches out the door and beef up its new business in the local multipoint distribution system (LMDS) market, a new wireless technology. Mr. Flynn said Newbridge is winning half the LMDS contracts on which it bids. The purchase of Stanford Telecom will help cement that leadership position. "The technology we get from that deal will give us a real lead in the broadband wireless LMDS market," he said. Newbridge's revenues from LMDS will be 40% to 50% above the $100-million (US) the company had projected for this fiscal year, he added. But Newbridge's more immediate problem is to recapture market share in the United States for its flagship asynchronous transfer mode (ATM) equipment, which makes up the vast bulk of its revenues. A report by International Data Corp., to be released tomorrow, shows Newbridge is the market leader in ATM in the Asia-Pacific region, capturing 37% of total sales in that region. But Asia-Pacific only represents about 18% of Newbridge's ATM sales. Newbridge announced Monday it is initiating field trials for its next-generation switch with British Telecom PLC and SBC in the United States. U.S. research firm Ryan Hankin and Kent (RHK) estimates that the market for core switches like Newbridge's should reach $8-16 billion (US) in 2003.

To: Charlie Tuna who wrote (15856)	12/15/1999 4:25:00 PM
From: Doug	Read Replies (3) \| Respond to of 18016

Charlie: Why would Flynn want to rock the boat at this stage and encourage Investors to sell down.? If that does not make sense, it is logical that NN has decided its time to raise value. This is a mature Company who by now know that if they have an Analysts call they must have some good news or else incur their wrath. On the basis of logic & timing , it is more likely that the cc will prove favorable.

To: Charlie Tuna who wrote (15856)	12/19/1999 11:45:00 AM
From: Charlie Tuna	Read Replies (1) \| Respond to of 18016

Re-Post of IndInvestor Analysis from 11 22: individualinvestor.com Comment: They seem to make a strong case.Except the buyout price seems low.Any thoughts? Article: David vs. Goliath: Newbridge Networks? Exit Strategy Tell us what you think in NN's Board. TODAY DID YOU MISS A DAY? Last 7 Days Archived -------------------------------------------------------------------------------- individualinvestor.com By Dave Sterman, Director of Online Research (11/22/99) Terry Matthews has seen enough. The Chairman and founder of Newbridge Networks (NYSE: NN - Quotes, News, Boards) has seen his 22% stake in the company dwindle in value from $2.85 billion to just $700 million. He has now asked bankers to find someone, anyone, to take his company of his hands. Like this Article? He has no other choice. His decision to bring in Stan Lutz to run the company last year turned out to be a big mistake. Not only did Lutz fail to boost the top line, but he also cleared the old ranks of management, many who served under Matthews in prior years. But Lutz is now gone and Newbridge?s management team is about as deep as the Seattle Mariners bullpen. That has led many to conclude that Newbridge simply can?t compete as a standalone company. In conjunction with Thursday?s announcement that Newbridge earned just $0.08 in its fiscal second quarter, Matthews said that he?s ready to sell his company. Rumors of just such an announcement sent the shares up sharply a few days earlier. But investors waiting on a deal shouldn?t hold their breath. Their faces will turn blue. Matthews knows that Newbridge could become much more attractive within a few months, thanks to the launch of a several key products that could put the company back on the map. And that 22% stake is quite an incentive to get the best possible price for the company. Currently, Newbridge is in the throes of a painful product transition. Its existing line of ATM switches are no match for the State-of-the-Art wares sold by Lucent Technologies (NYSE: LU - Quotes, News, Boards). As a result, Newbridge?s North American sales have been stuck in neutral for the last two years. Roughly 80% of Newbridge?s sales are to the traditional long-distance carriers. And though U.S. carriers have reduced the interest in Newbridge?s products, European carriers are quite enamored of Newbridge?s switches. European sales rose 38% in the second quarter, compared to a year earlier. A strong relationship with Siemens (NASDAQ: SMAWY - Quotes, News, Boards) has bolstered the company?s profile on the continent. In fact, Siemens accounts for almost 20% of Newbridge?s sales. Sales, both here and in Europe, could get a strong boost in the spring when Newbridge unveils a pair of new, faster switches. The first one, will transmit data at 50 Gigabits per second. The second, a 350 Gps switch would leapfrog any currently available switches. Those switches will also incorporate scads of Internet- related software features. Long-distance carriers are quickly upgrading to ensure that their networks are fully integrated with the Internet. That should help Newbridge hang onto the number two slot in the $1.5 billion ATM switch market, a market that continues to grow 30% a year, according to ABN Amro. Newbridge?s engineers are also keen on advancing the company?s broadband wireless technology. A recent purchase of Stanford Telecom (NASDAQ: STII - Quotes, News, Boards) should help Newbridge as it rolls out several new products for the wireless niche known as LMDS (Local-to Multi-point distribution). Many feel that re-wiring every home and neighborhood for high-speed Internet access is simply impractical. LMDS is being touted as a clever alternative. In recent weeks, many have speculated that Alcatel (NYSE: ALA - Quotes, News, Boards) or Ericsson (NASDAQ: ERICY - Quotes, News, Boards) might step up to the plate and buy Newbridge. Alcatel has already quashed any rumors, and Ericsson has shown a greater proclivity for smaller companies. Siemens and Tellabs Instead, Siemens and Tellabs (NASDAQ: TLAB - Quotes, News, Boards) are better suited to devour Newbridge. After Nortel Networks (NYSE: NT - Quotes, News, Boards) bought Bay Networks, Lucent bought Ascend Communications, GEC-Marconi bought Fore Systems, and Alcatel bought DSC Communications. Of the large global telecom equipment players, only Siemens is still searching for a dance partner. Since Newbridge already enjoys a strong reputation in Europe, and the two companies product lines are already quite complimentary, a deal makes sense. Here in the states, Newbridge?s emerging wireless products should hold great appeal for Tellabs. After walking away from a potential deal to buy Ciena a while back, Tellabs has been on the prowl for another deal that would help it penetrate new markets. Newbridge?s products make a nice fit. Bottom Line: Over the next few weeks though, shares of Newbridge will likely fall back to around $15 as investors come to realize that any buyout is far from imminent. But by the spring, Newbridge should be ready to throw in a wedding dress; and a march down the aisle could be worth $25-30 a share. The stock closed Friday at $21.50