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

To: Warren Gates who wrote (7639)	10/25/2000 5:39:02 PM
From: Bosco	Read Replies (1) \| Respond to of 14638

Hi Warren, this is academic, but for argument's sake, I don't know if I could agree with you --- that NT did the Q2 on purpose to affect LU and ATON acquisitions. At least I see it from a different angle. While having a high stk currency will help to for acquisition purposes, or even a suggestion to potential customers of her financial strength, LU and NT customers are not born yesterday type. They couldn't care less if these two stock prices. They care about the best price/performance products [well, there could be exceptions, customers who have financial gain! Hin ;)!] So I cannot see the logic in moving some of the Q3 #s into Q2. Quite the contrary, the ATT deal was held back [unfortunately, it wasn't big enough to cover the shortfall] In terms of M&A, at the risk of offending the ATON survivors here, it was fairly much an captive. A good one, but captive nonetheless. Case in point, even to this day, no one is buying FFIV. That said, the NY debacle 2 or 3 yrs ago has demonstrated Mr Roth is a quickstudy. I mean, he has made mistakes. Not counting customer's inventories is one of them. But if the NY debacle is the guide, he will move quickly to rectify that. If he has to give better guidance, more conservative estimate, or even holding back revenue recognition, I think he is up to the task. So, in the end, you and I agree how NT may respond to the current crisis! best, Bosco

To: Warren Gates who wrote (7639)	10/25/2000 8:34:29 PM
From: Dave Gore	Read Replies (4) \| Respond to of 14638

Sure, but the real problem is analysts who built in the high valuations in the first place. When you think about it, there is no reason ANY company's stock price should be penalized for ONLY growing revenues by 90% or earnings by 40% going forward. Heck, if any of us gets a pay raise of 5% a year we consider ourselves pretty fortunate. If we get a 7% guaranteed rate of interest for our kid's college fund we are thrilled. We used to think that a company that grew by 10% a quarter was doing phenomenally well. What happened? How did we get to a position that growth of 90% is considered a disaster? Of course, the obvious answer is that SOMEHOW the analysts convinced some people to pay 200 or 1,000+ times earnings, which is crazy. What's worse is that there are stocks selling for over $100 or more that have no earnings and are losing money! It's nuts! How did anyone buy into it? They get a huge run-up and then almost without warning, the little guy comes home from work and is 25% poorer. How about some who came back from a 3 week vacation last year and their dotcom stock with massive losses finally decided to drop by 50% or more? How could ANY analyst give PriceLine.com a target price of 100 last year and expect anybody to not roll over laughing his guts off? But they did and some paid ridiculous prices for PriceLine and many other dot dreams. It's insane and I wouldn't complain so much except that the little guy usually gets in late, buys too high, and sells too late. Somebody has to lose when a stock goes down and it usually isn't the big guys. In fact, he is winning on the way up AND the way down, I bet.