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Technology Stocks : NHC COMMUNICATIONS (TSE:NHC) acquiring THE FIBER COMPANY -- Ignore unavailable to you. Want to Upgrade?

To: Lalit Jain who wrote (106)	1/29/2000 1:26:00 PM
From: SteveG	Read Replies (2) \| Respond to of 856

dang, have been buying NHC.TO for a week and wasn't quite done hoping to add a little more on Monday <g>, but since you guys let the cat out of the bag and i already own a LOT, might as well jump in here as well with a copy of an email I sent yesterday to some friends who are institutional guys at Goldman and Robbie: ~~~~~~~~~~~~~~~~~~~~~~~~ fyi - Turnstone just raised their offering price to $23-25. They will have 30MM shares outstanding for a IPO pricing market cap of ~$750MM, and as the hottest deal of the week, it's expected to at LEAST double to $1.5B. TSTN is widely thought to have virtually no current competition to their specific DSL matrix switching product (CX-100) which remotely provisions, line qualifies and switches DSL services. In fact, TSTN doesn't even mention NHC Communications (a small canadian company which trades on the Toronto exchange with the ticker (variously, depending on quoting service): NHCMF or NHC&T or NHC.TO or NHC-TC -- but careful not NHC - National Health Care - trading on AMEX) in their red herring. In fact NHC ( nhc.com ) has a product which matches and exceeds Turnstone's CX100 in functionality (NHC's switch is currently doing multiple service types such as ISDN and IDSL, as well as xDSL, and also offers a larger switch matrix) NHC is unfollowed here (and I think even in Canada) and has been on a tear the last two weeks - rising ~6x from a market cap of ~US$11M to ~US$68MM - quite a nice move (which i caught some of) but still ridiculously far from the anticipated market cap of the #1 player in this current 2 player field. In fact, NHC had 2 announcements recently: nhc.com biz.yahoo.com NHC actually recently "stole" this new business from Turnstone. The 250 co-locations ("colos") that NHC announced compares with ~1000 that TSTN has. So, the street will soon give the leader of an explosive emerging field a market cap of probably between US$1B-$2B. Do you think there is a comp sympathy play with a company with an expected 1/4 the colos as the leader, who is stealing the leader's business with an arguably better product, and has a current market cap of only US$70 (in spite of the recent explosive runup)? Do you think NHC Comm will be free standing in a year? TSTN uses LU as an OEM - will Nortel or CSCO step aside from this explosive business, and do you think NHC would sell for less than say 20% of TSTN? (only 20% of TSTN with a market cap of say US$1.5B [at US$50/share] would be NHC Comm at US$300MM [~US$18/share or ~C$26/share] - a 4.5x from friday's closing price) Just thought this might be of interest. ~~~~~~~~~~~~~~~~~~~~~~ btw, i definitely think market leader TSTN deserves a larger market cap than NHC.TO, but not a 20x.