Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : F5 Networks, Inc. (FFIV) -- Ignore unavailable to you. Want to Upgrade?

To: gloff who wrote (1282)	9/28/2000 3:19:46 AM
From: Puck	Respond to of 1801

EXDS's acquisition of Global Center will expand EXDS's customer base by 25% immediately and double the number of data centers it has, thus expanding the opportunities for it to cross sell F5 Networks services. This is a huge development for F5 Networks.

To: gloff who wrote (1282)	10/3/2000 4:19:07 PM
From: baystock	Read Replies (1) \| Respond to of 1801

From briefing.com Alteon WebSystems (ATON) 128 -15: Consolidation in the networking sector rages on. Nortel (NT 74 1/4 -4 1/4) agreed to acquire Alteon for $143.77/share in stock, based on yesterday's NT closing price of 78 1/2, but that price is already down to $136 due to NT's decline this morning. There was no premium here, but note that ATON has had a huge run in recent weeks after hitting a low of $43.50 on May 25. We have written about ATON and the intelligent networking business several times recently, as this business has been exceptionally strong (Alteon posted sequential revenue growth of 82% in Q2). Alteon makes Layer 4-7 switches, which is referred to as "intelligent" or "content-aware" networking. These switches have become a key component of Internet data centers, whether they are purchased directly by enterprises or by colocation providers who offer outsourced solutions to businesses. Growth in this business is tracking growth in the Internet, which is to say that it has been explosive. One direct competitor of Alteon was ArrowPoint, which was snapped up by Cisco in May for $5.7 bln. The two leaders will thus join the two networking giants -- CSCO and NT. The remaining pure plays are F5 (FFIV) and Radware (RDWR). While stocks of these companies traded up in sympathy with ATON this morning, they are now fading, and rightly so in our view. These two companies were already lagging behind ArrowPoint and Alteon -- now that those two leaders have the marketing and sales muscle of Cisco and Nortel behind them, it is hard to see how this helps F5 and Radware. They are only valuable now as potential takeover plays, and it's not clear who is left to acquire these companies. Extreme (EXTR) and Foundry (FDRY) are specialists in Layer 3 switching and are both moving into Layer 4-7 switching, so it's conceivable that either could be an acquirer, but it's more likely that they will continue to build their technology through internal R&D. As such, they will only add to the competition in the Layer 4-7 space, and they too have larger sales organizations than F5 or Radware. Unlike many acquisitions that give a lift to entire sectors, NT's buy of Alteon does not appear to be good news for others in this group. The fact that there was no premium and, more importantly, the reality that competition in this space is now far more intense should be cautionary news for F5 and Radware.