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

To: Gary Korn who wrote (26622)	12/6/1997 9:40:00 AM
From: Robert B.	Read Replies (1) \| Respond to of 61433

Gary, could you provide a rationale for why CPQ would be interested in Ascend. I'm having difficulty understanding the synergies there. Thanks!

To: Gary Korn who wrote (26622)	12/6/1997 2:33:00 PM
From: blankmind	Read Replies (3) \| Respond to of 61433

time to revisit dilution (part 1). there has been discussion on this thread about asnd dilution on any acquirer. 1. we know if stock is issued for asnd from the acquiring company than we the acquiring companies stock will be diluted with more shares. 2. what bothers investors is price dilution. but would an asnd acquisition necessarily cause this?

To: Gary Korn who wrote (26622)	12/6/1997 2:39:00 PM
From: blankmind	Respond to of 61433

time to revisit dilution (part 2). the most obvious cause to price dilution is purchasing a company for a premium to the industry. when asnd purchased cscc at a premium, this caused price dilution to asnd shareholders. yes they acquired assets in the stock swap, but at a premium. both are networking stocks, and since a premium was paid, until the new company can expand to fill this premium, the price will be fall.

To: Gary Korn who wrote (26622)	12/6/1997 2:53:00 PM
From: blankmind	Read Replies (2) \| Respond to of 61433

time to revisit dilution (part 3). but how what happens when two companies from different sectors combine, will there be price dilution? 1. currently lu is mentioned so lets evaluate them first. will the street perceive this as a move that will bolster sales and bring new products faster. so instead of being dilutive, new markets would be reached, sales would be pegged as being higher,... and now asnd appears cheap because they become a threat to csco with the new muscle. so lu's stock would not decline, but may rise. 2. if csco purchased asnd. because csco and asnd have many overlapping products, my bet it would be price dilutive. even though csco would be even more dominant, the acquistion and merging costs would be higher. although it is possible it will ot be viewed as price dilutive because of csco's current p/e and growth, combining it with asnd's decisively lesser p/e. thoughts?