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

To: SteveG who wrote (7856)	11/20/1997 1:58:00 PM
From: Frank Ferrari	Read Replies (2) \| Respond to of 21342

To All: Briefings account of the Dain Bosworth downgrade (Not sure I totally agree, but it does identify the risks) 12:30 ET ****** WESTELL TECHNOLOGIES INC. (WSTL) 17 9/16 -1. Yesterday's announcement that Texas Instruments (TXN 101 13/16 +3 13/16) plans to acquire Amati Communications (AMTX 19 11/16 -1/16) for $395 million or $20 a share does not bode well for this telecommunications products concern, or at least this is the view expressed by Dain Bosworth. Prior to yesterday's announcement, Westell had signed a merger agrement to acquire Amati. Instead, it has settled for a one-time payment of $14.8 million in accordance with the termination provisions of the merger agreement. According to Dain Bosworth, it has cut its investment rating on WSTL to a "neutral" from a "buy" based on the view that the latest deal between TXN and AMTX leaves Westell without "ownership of the intellectual property behind the DMT (discrete multitone) implementation of ADSL (asymmetrical digital subscriber line) technology." While Westell has signed a multi-year strategic alliance with Texas Instruments providing it with substantial benefits, it leaves Westell without the property rights to the ADSL technology, something that Dain Bosworth feels detracts from the value investors are willing to place on WSTL shares. This latest alliance will also press hard of WSTL to defend its leadership role in the ADSL arena, particularly as the technology moves from development to deployment as it will be competing with other vendors and systems integrators that have their own technology or access to similar technology acquired from TXN as WSTL has done. Hence, the firm has moved quickly to advise investor of the change in landscape now that a new relationship has been formed. Cheers Frank

To: SteveG who wrote (7856)	11/20/1997 2:17:00 PM
From: bill c.	Read Replies (1) \| Respond to of 21342

SteveG: >> If COMS (say, or any large networker or telco integrater) wants to buy a C6X-DMT chipset, they will also likely get volume pricing and can FURTHER sell at a loss to win market share. << At this time, I don't see COMS getting a better price on the TI/AMTX solution than Westell. Westell feels they will have the low cost solution. Now if COMS wants to sell at a loss, owning or not-owning the patents doesn't matter. I think 14.8 million + $400 million in stock will enable Westell greater flexibility on pricing than owning the patents. Down deep, would I like to own the patents... sure, but not for $418.8 million... until later.