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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: bill c. who wrote (20969)	10/20/2000 8:02:33 PM
From: Mark[ox5]	Read Replies (2) \| Respond to of 21342

Bill That is all good and dandy However, you move to new business lines to make money, not just for revenue purposes. Westell is not making money on this business. I'd estimate they made .06 EPS from Teltrned 2 Q's ago and .04 to .05 in this most recent Q. (assuming almost no synergies on the Sales and R&D side which Im sure there are) Take that EPS out from each Q, and take the cash infusion of $29 Million out and its ugly out there. WSTL paid $775 Million for this... for what? They are worth in total sub $350 Million out. MZ is good at making everyone around him rich... himself, Teltrend executives, etc, except for shareholders. Lets call him "Midas" at least to those around him. This is smoke and mirrors my friend. I have studied the gross margins for Westell in the past 5 quarters, one by one... broke out the equipment side based on historical, based on Teltrend and my conclusion is 2 quarters ago WSTL sold CPE for 2% gross margin, the next quarter (the 62M Q) they were back up to 11% gross margin, and in this debacle quarter they were back down to 1% gross margin. I, nor you, nor any non insider knows this number exactly but I played with the numbers for a long time and I'd estimate my degree of error is at most 2% on the upside or downside ... as each quarter passes the degree or error could increase more, but either way this compares to comparable 20,27,33% quarters for Efficient. They make money off their CPE, they have cash. Westell could pull a miracle .. but at this point the best i can see them at is a high volume, grocery business in DSL.. ramping out ADSL, taking some share away from ALA and EFNT but at no great benefit to them on the bottom line (yes there is a benefit on the top line, but when all is said and done you are paying for profits, not revenue)