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

To: john dodson who wrote (24980)	11/29/1997 11:16:00 PM
From: Sector Investor	Respond to of 61433

<<What time frame would have to pass before you doubt the CPQ interest in ASND? >> Probably right after they purchase DEC?

To: john dodson who wrote (24980)	11/30/1997 12:23:00 AM
From: Gary Korn	Read Replies (2) \| Respond to of 61433

What time frame would have to pass before you doubt the CPQ interest in ASND? That is, if 1Q 98 comes and goes, and no buyout (or CPQ does some other major purchase), would that shoot a hole in your theory? Maybe sooner? John, Good questions. The easy one first. If CPQ does another major purchase, it ain't buying ASND. In response to your other question, I'd also give up on CPQ(at least vis-a-vis my incessant drum beating) if 1Q98 comes and goes without a buyout of ASND. After all, were CPQ truly interested, it had to have known that ASND's stock price could rise in 1998, making the acquisition too costly. It had the currency to purchase ASND in December, 1997, when ASND was at its nadir. You didn't ask the question (or politely did not push it this far), but if even just January 1998 comes and goes without CPQ/ASND, I would say that CPQ walked away from any talks. It had the currency to buy ASND on 12/11. If it wanted ASND, it would not have waited beyond January. CPQ also has a YR2000 $40B deadline to meet. It needs to get cracking on something. Frankly, if even January 15 comes and goes without a CPQ/ASND deal, I'd stop beating the CPQ/ASND drums. It would seem that the next potential buyer -- if there were such a buyer -- would be LU, and not until 2Q or 3Q. I think a deal with someone is in the works, that management's general silence is reflective of that fact, that all concerned would prefer something to be announced before analyst upgrades occur at or around year-end, and that all concerned would prefer something to be announced before the networking sector in general rebounds substantially (taking ASND with it). I also think a potential hostile bid for ASND was made on or about 11/11 (the strength of ASND on two days at about this time, against a tremendous market downdraft, almost cannot be explained any other way). I think that that bid was turned down by ASND because another prospect was in the works. But I'm guessing, like the rest of the thread. Worst case, we are looking at about $1.09FY 97 and close to 40% revenue growth in 1998 per Michael Ashby, the new "conservative" CFO from PacBell. That does suggest there is a little room for improvement in the stock price, even failing a takeover. Gary Korn