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Technology Stocks : COM21 (CMTO) -- Ignore unavailable to you. Want to Upgrade?

To: Scott C. Lemon who wrote (1678)	2/4/2000 2:33:00 PM
From: pat mudge	Read Replies (5) \| Respond to of 2347

Scott -- LANCity is now part of NT, correct? When you look at Shaw, watch for Motorola. I believe they're involved in about 50% of their network. Now, an update on Terayon's disconnect between public statements and SEC filings regarding recognition of revenues from Rogers. I spoke with my attorney at McDermott, Will & Emery and was told there's a chance the SEC filing was composed before the company received a waiver and that it's possible Mr. Rakib was speaking truthfully on the company conference call. [The S-3 was dated January 25, 2000; the CC January 18, 2000.] He went on to say the audited numbers have to be filed within 90 days of the end of the quarter and that we could expect to see them by March 30. Since the SEC is cracking down on the auditing process, they'll have to disclose everything, including whether Rogers' numbers were included. He assured me the truth will out. I asked about the company's responsibility regarding their key focus and if there was a grey area between preaching one message and executing another. I explained about their earlier focus on S-CDMA and how they're buying small companies in order to shift away from the non-standard S-CDMA to a full array of last-mile solutions. He said there are no grey areas. If it's not true, it's fraud. If the SEC filings list the company as being focused on S-CDMA products, then that, indeed, has to be their focus. If they've changed directions and haven't changed their story, it's fraud. If the CEO is saying they'll have an S-CDMA-based DOCSIS product by the end of the year and they've not submitted one for testing, it's fraud. If their DOCSIS sales are tied to an OEM model, they need to make that clear. As for Rogers, if the company doesn't receive revenues from them, they need to say so. It represents a material change and they have to make it public. He said to watch for the 424B, due out on or before March 30. We plan to speak again next week at which time we'll discuss whether to take the exploration further. I'm not sure it would be worthwhile to contact Terayon's auditors, but it's certainly a possibility. As for George Gilder's organization, I doubt they're doing anything illegal. If they want to back S-CDMA they have every right. However, if they're saying Terayons' success --- including their chances of benefitting from the AOL-Time Warner merger --- are based on TERN's having S-CDMA, then for their own reputations they would do well to find out the status of those products. Besides the numbers, I'll also be watching TERN's SEC filings for wording of their Rogers product development alliance. That relationship has given the company credibility and if it's proven to be a public relations front, then we're again in illegal territory. "If it's not true, it's fraud." Bottom line: the company may be squeaky clean, but right now they have a lot of explaining to do. Pat