Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Fine who wrote (3123)	12/12/1997 8:23:00 PM
From: RFF	Respond to of 6980

Paul, Thanks for the response. I also e-mailed them with the facts, so hopefully they'll post a new article saying how Bay Networks is bucking the trend and maybe that's why all the other networkers are doing so poorly - Bay's taking their market share. Well, hopefully we'll atleast get a retraction. RFF

To: Paul Fine who wrote (3123)	12/12/1997 9:10:00 PM
From: jkb	Read Replies (1) \| Respond to of 6980

I just read the same thing and I'm glad you guys did too. Paul - let us know how that turns out w/ Motley Fool. What a bunch of boneheads. One other note - I may be wrong - but it sure did not seem that wall street took note of management's positive statements this week. Was that news story properly disemminated throughout the investment community? -Jay

To: Paul Fine who wrote (3123)	12/15/1997 6:23:00 PM
From: Paul Fine	Read Replies (3) \| Respond to of 6980

Hi Everyone- Motley Fool today posted their "correction" to the Friday article on Bay re the so-called rev. warning. You guys aren't going to like the "correction" very much, and Bay Inv. Relations will like it even less: "Shareholder relations hit a new low last week. Those who live within the happy time continuum where individuals and institutions have equal access to information got a quick double jolt of reality from the likes of Bay Networks (NYSE: BAY) and Fine Host (Nasdaq: HOST). Whether it was carefully crafted management doublespeak to the press accompanied by obvious plain talking to the institutional contacts or no speaking at all, rebuffed individual investors were confused, stupified, or otherwise just plain stunned by the information, disinformation, and just plain lack of information while the two stocks wilted under intense selling. Going in alphabetical order, we have the all-to-common story of Bay Networks last week informing Donaldson, Lufkin & Jenrette analyst Stephen Koffler during a company visit that revenue growth would not meet expectations. Specifically, Koffler stated in a research note published Wednesday morning that the company's line of routers would turn in flat quarter-over-quarter growth in the fiscal second quarter ending December 31. Koffler concluded in the note that Bay's router growth was "slowing considerably" and would not deliver the kind of results in fiscal 1999 that the company had originally planned on. Although Koffler only cut earnings estimates for the full year by two cents to $1.08 per share, the implications for next year were still undetermined. Bay Networks management responded to this looming crisis with one of most skilled examples of press release doublespeak ever witnessed. A company official told Dow Jones late Wednesday that it stands by its second-quarter earnings per share estimates of $0.26 and anticipates that revenue overall will grow sequentially. Conspicuous in its absence was any confirmation or denial by Bay that router growth was de minimus and whether or not the company's estimates for the rest of the fiscal year would be impacted by new assumptions about how much the router business could grow. The company also carefully avoided saying whether or not it would make its revenue estimates, indicating that more than likely revenue would be off as Koffler had confided to his institutional clients. Although for "competitive reasons" Bay does not offer individual investors a breakdown of where its revenues come from in its federal filings with the SEC, Nutmeg Securities Ltd. analyst Andy Schopick stated in the same Dow Jones wire story detailing Koffler's note that routers and shared media hubs account for "most of Bay's revenues." With routers not panning out and shared media products suffering "an industry wide decline in demand" for Bay in fiscal 1996 that has continued until today, the picture hardly looked good for the company. However, by skillfully handling the media and affirming earnings estimates for the quarter (without confirming revenue estimates), the company got the mass of individual investors to stay put. (In fact, Bay investors got very defensive when the potential that Bay would miss its revenue estimates was mentioned in this column Friday.) As much as one can rag on Bay Networks for sending a different message to institutional analysts during company tours than it did to individual investors, at least itwas talking to somebody. As horrible as it is to give institutional analysts a sense of the revenue breakdown without disclosing this same info to individuals in spite of 18 filings made to the SEC over the last twelve months, at least it was saying something." Anyone from Bay care to comment? Paul