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Technology Stocks : Cabletron Systems (CS: NYSE) -- Ignore unavailable to you. Want to Upgrade?

To: Yogizuna who wrote (7970)	4/30/2000 5:01:00 PM
From: Jules V	Read Replies (2) \| Respond to of 8358

Barron's online: Q: And another? A: Cabletron. The stock trades at 22, and it was beaten up rather badly in the quarter because they reduced estimates. Q: A real growth story. What's to like? A: Cabletron is going to break itself into four parts. They are in the switching and networking business. If you do a valuation on the different parts you get to $50-$65 a share on Cabletron. They also have a venture-capital fund with 30 or so investments. Q: Why isn't the market recognizing the value? A: They did a sloppy job of articulating how their legacy businesses were going to decline, and there was a lot of confusion. But the four parts that will be spun out will be comparable to companies such as Extreme Networks and Alteon Web Systems that trade at big multiples. Prisma, a networking management company, compares with Micromuse and Digital Networks and is scheduled for a spinout sometime this summer. Riverstone, an emerging content and infrastructure company comparable to Foundry Networks and Juniper Networks, will probably be spun out in the fall. Q: Surely there must be concern about whether they'll pull off the IPOs? A: Yes, of course. Q: If they don't complete the spinouts, are the fundamentals still attractive? A: Yes, because when it comes right down to it, whether or not the companies are spun out or whether they stay as one doesn't make a lot of difference except it is more difficult to recognize the value. Q: What do you expect them to earn? A: They will do 60 cents a share for fiscal 2001, up from 37 cents this year.