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

To: Larry Myers who wrote (24994)	11/30/1997 12:49:00 PM
From: Gary Korn	Read Replies (1) \| Respond to of 61433

Do you really believe that if CPQ were to suddenly double their shares the value per share would remain the same at $30? Why not just issue a boat load of shares and then buy CSCO, 3COM and MSFT too? I've read all your posts on "CPQ/Networking" and aside from the fact that CPQ has some interest in networking how do you make the quantum leap that they want to own ASND? Other than you wishing this were true when has CPQ or anyone else with any credentials in the mergers and aquisitions world tied these two companies together? I don't mean to be argumentative I am just asking the question because I really want to know. Larry, In response to your first question: To begin with, when CPQ splits from 750MM to 1.5B, its share price will be cut in half from 60 to 30, which is what I said. I also said that if CPQ were to use another 1.5B shares to make a totally non-dilutive acquisition, the share price would remain at 30. For example, if CPQ bought 45B worth of Tbills with the remaining shares, then the shares stay at 30. I'm not saying that there won't be dilution in a purchase. The manner of your question suggests you think I don't know how the issuance of new shares (as opposed to the authorization of new shares) can dilute the stock price. I think you need to read my post more carefully before calling me on the carpet on this issue. In response to your second question: First, I think it is painfully obvious that CPQ is going to acquire a networker, not necessarily ASND. If you read some of my posts, I've expressed concern that CPQ might bypass ASND in favor of, perhaps, COMS. Second, ASND is obviously in CPQ's radar screen, for it is mentioned as one of the "dominant" players in RAS (along with COMS), a market in which CPQ itself has stated it wants to be dominant. I've also listed, in the past, a number of other indicia of possible acquisition activity. So, I don't think it is such a "quantum leap," as you suggest, to consider the possibility of a CPQ/ASND combination. I have no idea whether it will happen, as I have repeatedly said. And, unlike others with respect to other companies, I've not said it is going to happen on such and such day without any conceptual support whatsoever for the proposition. Over the past 2 months, Larry, I've taken the time to compile a lot of evidence and clues in support of the proposition that ASND is in talks to be acquired and that CPQ is a possible candidate. It has taken a lot of work. It takes you no work to throw out words like "quantum leap." Furthermore, where is your evidence that it is a "quantum leap" that CPQ might want to own ASND? I spent several hours doing research and came up with some articles potentially in support of that proposition. What have you done, other than fling words? Gary Korn

To: Larry Myers who wrote (24994)	11/30/1997 1:09:00 PM
From: Gary Korn	Respond to of 61433

Larry, Further to my last post: Given the assumption that CPQ wants to become dominant in "RAS" (and RAC) with a 25% market share. What does it do? The market leaders as of last quarter (per Dell'Oro): COMS: 39% ASND: 24% CSCO: 18% SHVA: 4% OTHERS: 15% Gary Korn P.S. The operative quote from Alan Lutz, head of CPQ Communications Division: "When we purchased Microcom, it was enormously important to keep the technology base, to keep the sales organization in place along with the top 20 movers and shakers. We didn't want Microcom, a great technology provider, to consider itself an OEM company. We wanted 25 percent of the RAS market. And that meant that we were going to put in place the plans and assets that would allow us to compete with the likes of Ascend, Cascade and USR/3Com. The goal was a dominant market position." P.P.S. This doesn't mean that, definitively, CPQ is going to acquire ASND. It does suggest, to me at least, that the possibility is less than a "quantum leap."