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

To: Gary Korn who wrote (25004)	11/30/1997 4:06:00 PM
From: satish kamat	Read Replies (2) \| Respond to of 61433

Gary: Thanks for putting together a very strong case for an aquisition of ASND based on public info (vs. my broaker told me). It's good that we have people from different disciplines ( lawyers, technologists, CPA, day-traders, options specialists, college kids, etc.) contributing to make an intellegent decision. As I have posted earlier, I believe that ASND will be aquired soon either by a PC maker (CPQ) or a telco equipment maker (LU,NT). What I am not sure about its nature: it more look like a hostile merger. And following may explain why: Maveric posted this earlier: <(11) Mory mentioned he exercised options recently to thwart some possible hostile takeover (According to SEC rule, there is a black-out period between exec. option exercising and when the M&A takes place)> - - this will explain a lot of recent activities which made us split our hair. [1] Buying CSCC: If you have a strong shot at becoming industry giant, you start by putting together the infrastructure though it will result in a short term beating (price going down to 22). [2] Continued insider selliing spread out over entire window to ensure that any takeover will be delayed. However, not a single executive sells the entire position. [3] No buy-back program though company is sitting on $550MM [4] Bringing in a well-known merger expert CFO with right connections (PacTel). I think you are correct in hypothesizing that ASND was approached by more than one org. for possible merger in last few weeks, but Mory wants top doller ($100). That may explain if we don't see any announcement as ASND will sell when company is seen strong again. satish kamat

To: Gary Korn who wrote (25004)	11/30/1997 7:32:00 PM
From: Harry Ehrlich	Read Replies (1) \| Respond to of 61433

Gary, I understand there is a more timely source for 10-K's and 10-Q's than the SEC edgar database. Would you know about that source? Harry

To: Gary Korn who wrote (25004)	12/1/1997 10:18:00 AM
From: Inga	Read Replies (3) \| Respond to of 61433

I am curious why you are working so hard on the CPQ/ASND acquisition theory. I hope not to spoil your pipe dream but I have a brother who has been a middle-level manager at Compaq and he told me that ASND acquisition is not very likely since Rosen & Pfeiffer are not interested in non-commodity market. They abandon a lot of specialized research projects (graphics, servers, etc) to use canned commodity hardware to minimize R&D costs (too much vaporware). Acquiring a high-tech non-commodity company may spell disaster from Compaq high-level personnel. This is the Compaq philosophy which works well for them after Rod Canion days. Cheers,

To: Gary Korn who wrote (25004)	12/1/1997 8:30:00 PM
From: swrdfsh	Respond to of 61433

Gary: As I understand it now: Insiders are not prohibited per se from borrowing against their shares. It would just be more practical to sell. Furthermore, I would think that any lender accepting insider stock as collateral would have to further discount its value, because, as we know, there would be periods when the shares can't be liquidated to cover a default. So, recent sales do not discredit a merger theory. However they do not necessarily credit a merger theory. The sales could be for any number of unrelated reasons. Although I'm now more comfortable with this part of the takeover picture you have painted, I think it is one of the weaker clues. As you have conceded, you are guessing. What is hard to dismiss is the current market price and an acceptable takeover price vs. the premium anyone would be willing to pay. This is the most important flaw in all the talk. Mory, and anyone who is a longterm investor in ASND, will insist on some fair value for future earnings. Even those who have recently dissed ASND admit that eventually growth will be strong. That is currently not priced in the stock. Once earnings pick up and management shows they can provide reliable guidance, the stock will rise. Eventually we will be within striking distance of a reasonable takeover price. Only then will ASND be a serious takeover target. Here is how it will have to work: 1. Let's assume that somewhere between $45 and $55 is the minimum acceptable takeover bid. 2. Judging from other takeovers, $10 is probably the maximum premium over market that a buyer can justify paying. 3. That means ASND will have to trade at least around $40 with solid support at $35. 4. That also means ASND will have to show improvements in fundamentals. 5. All those things will take at least six months to play out. 6. Whenever that does happen, there will have to be a willing buyer who's a good fit with good business reasons for a merger. Now, (for entertainment purposes only) here are the odds/confidence factors I place on these things actually happening. 1,2,&3, as minimum preconditions of a merger at any time: 90% 3,4,&5, as happening: 70% 3&4, as happening in the next 18 months: 95% 1,2,3,4,5,&6, as happening: 35% 1,2,3,4,&6, as happening in the next 18 months: 40% Comments invited from all. swrdfsh