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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: John Messbauer who wrote (5480)	4/23/2000 10:58:00 PM
From: Bosco	Read Replies (1) \| Respond to of 14638

Hi John - these are good questions. It is hard to say for sure. CSCO is indeed very skilful in acquiring companies, and even if there were failures, they are not too noticeable. So, Mr Chambers should get credit for that. While NT is new in this game, I think WS has given her a better look these days after seeing her absorbing the earlier batch of acquisitions --- especially her handling of BAY acquisition --- with grace. More important, notice that there is certain level of reverse adaptation happening here. That is to say, NT is taking on some of the personalities of the acquired. To me, this is a good sign. This is more than collecting new operating units; rather, NT is assimilated into the new cultures as much as these diversified cultures being molded into the NT image. Ultimately, we need to look at the reasons behind these acquisitions, in general and in particular. As it is the theme, timing is everything. NT is determined to speed up the product cycle. So, developing technologies inhouse must reconcil with the timeliness of technology deployment. Cortek is a classic case. It is said that NT has also been developing tunable laser. However, when she deems Coretek's is a generation ahead, then she has made the decision to acquire it. In terms of stock price, I think it is more important to think of relative strength. I mean, when the market is strong, sure, NT may have to dish out higher price. However, if the market is weak, but so long as NT is not relatively speaking, similar ratio can be maintained. The only exception is an all cash deal. Is BAY a $7B deal? CLFY $2.1B? These numbers change almost immediately. I do feel the builtin provisions like collars and performance clause are good protection for both parties though best, Bosco