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Technology Stocks : Aware, Inc. - Hot or cold IPO? -- Ignore unavailable to you. Want to Upgrade?

To: KHS who wrote (8010)	3/7/2000 10:51:00 PM
From: KHS	Read Replies (1) \| Respond to of 9236

Att: Mr. Anton Wahlman of Warburg Dillion Read, You have a strong buy recommendation on both VRTA and AWRE. It is clear AWRE has a solid foothold in the DSL space. <Wahlman told clients Aware is the only company positioned at the very top of the DSL (digital subscriber line) food chain with particular exposure, or royalty stream, to ADSL (asymmetric digital subscriber line) and G.Lite, which is the name designated by the International Telecommunications Union for a "light version" of ADSL.> You were also quoted saying: "As substantially a royalty story going forward, we believe that short of significant price or market share erosion, Aware could see one of the steepest sustainable earnings ramps of all DSL companies," Wahlman said. This is good support for AWRE. But you have an equal rating on VRTA. What is your response to AWRE's statement: <Virata may well come to market with competitive products, but first they must prove that they can deliver physical layer chipsets that customers will buy in a market where the requirement for features and performance is continually growing> What do you see in VRTA that AWRE does not see? Also AWRE stated that VRTA announced their chip set but with no customers mentioned. How can you rate VRTA the same as AWRE? You seemed so bullish on AWRE (thankyou), but you have the same rating placed on VRTA. You have some real explaining to do here. We wait for a reply.

To: KHS who wrote (8010)	3/8/2000 4:27:00 AM
From: Scrapps	Respond to of 9236

KHS & Jess: Is the analyst from Warburg for AWRE the same analyst from Warburg who does Virata? If it's two different individuals than it becomes more understandable as I see it. Good analysts are like ball players and jump around from firm to firm based on contracts, so we need to know if it?s the same one and his or her history. If I recall KHS you said it was the same person...I just want to confirm that. The word "Stinks"...I read as "smells". That is if I read KHS right. There appears to be an opened mindedness which goes along with your get to it attitude KHS. Stinks sounds like you've drawn a conclusion, but, when I change it to smells it indicates to me you are suspicious of something?and that is motivating you. The 30% of the float being shorted is well worth figuring out, not something to just ponder. Myself?I feel guilty of ignoring it. And may I suggest a couple of names who have shorted AWRE who may share some insight? Bill Vaughn is one and a very good sport, cuz I ragged on him?.heavy and he still threats me well. Steve G. is knowledgeable in the DSL sector, but we tend to enjoy being at odds with one another. My guess on why there is such a % of the float shorted is this?.Alcatel is the other ADSL market leader and they have a PR dept. which runs like a gatling gun. So AWRE gets hammered because of what Charles Pluckhahn from Stephens Inc. says in his latest Aware comments. Still, it is clear that both Virata and GlobeSpan are on the offensive, at least insofar as investor perceptions are concerned. The Virata announcement was accompanied by customer testimonials, something that Aware has not been able to arrange as a consequence of its status as a software vendor to its chip customers. As a result, Aware has been largely unable to disclose much detail to bolster its view that it will ultimately dominate that part of the ADSL chip market not taken by Alcatel, currently the largest vendor. We believe this situation could change. Virata?s claims should turn up the heat within the ADSL industry and could ultimately prompt Aware?s chip licensees, particularly Intel, to become more aggressive about their plans and technological capabilities. We won?t be surprised to see one or more of these competitors touting their Aware-supplied technology, although investors can be forgiven if they wonder whether Aware will get much credit from its customers that have heretofore said very little about their key software supplier. Therein lies the real dilemma facing Aware?s shareholders, who have seen the stocks of Virata and GlobeSpan rocket skyward in recent months, propelled by a potent mixture of chart patterns, rumors, press releases and adept promotion. Aware?s current situation reminds us of QUALCOMM, the wireless chip designer, which struggled for years to overcome technology issues, or Comverse Technology, the Israeli maker of networking equipment that, in its early years, couldn?t disclose the names of customers composing half its revenues because they were spy agencies. We believe Aware is an ADSL technology leader. We project that its licensees will gain 40% of the Central Office (CO) market and 50% of the CPE market. This announcement by Virata has no bearing on our CO estimates, as Virata?s management indicated that it has no immediate plans to enter that portion of the market. We believe our CPE estimates have factored in the type of competition that will come from other industry players such as Virata. As a result, we are leaving our estimates unchanged and reiterate our BUY rating with a one-year price target of $61.