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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Gary Korn who wrote (24710)	11/26/1997 12:15:00 AM
From: pass pass	Read Replies (2) \| Respond to of 61433

Gary, although my ASND shares will be a lot safer in Mr. Pfeiffer's hand than in Mr. Ejabat's and I would almost vote for any buyer, the likelihood for CPQ buying ASND is slim. It makes more sense for CPQ to buy DEC and fight off DELL in the server market. This is something CPQ knows how to do. Networking isn't CPQ's specialty. This is why DEC is selling its network product unit to Cabletron.

To: Gary Korn who wrote (24710)	11/26/1997 12:40:00 AM
From: Gary Korn	Read Replies (2) \| Respond to of 61433

I have no idea whether CPQ will or will not acquire ASND. I would bet, however, that CPQ will acquire some major networking company or companies sometime in the near future (it is issuing 2B in new stock for the stated purpose of acquiring businesses, albeit not necessarily networkers...but they are high growth, which is what CPQ wants). I had not known, before tonite's research, how much CPQ truly desires to get into this field (more so than owning DEC). It seems that a fundamental goal driving CPQ is fast revenue growth towards its goal of $40B sales in 2000. Okay, assuming that CPQ is now about $18B in sales, what would be the best acquisitions for it to undertake to reach that $40B goal? How best should it spend its money, assuming the expenditure will be in the networking arena? CPQ/NETWORKING article #2 (post 24710) said that CPQ needs to grow its revenues 23% per year to reach its target. ASND, at $1.2B, is only 6.7% of CPQ's revenues, but it is growing at close to a 40% clip (vs. a 15% clip for CPQ alone). And would COMS be a better revenue grower? Or would both be a good fit? (Maverick had once suggested COMS taking over ASND....if so, why not CPQ taking over both...what would that do for its revenues and its revenue target?) Could someone here who is good at math please figure out what it would mean, to CPQ, to acquire a revenue source equivalent to 6.7% of sales that is growing at some 3 times CPQ's remaining revenue sources. I mean,given its annualized revenue growth, wouldn't ASND actually be equivalent to something greater than a 6.7% revenue source? And, by the way, how does the math work out for a COMS/ASND duo? Help! Gary Korn