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

To: Glenn D. Rudolph who wrote (28945)	12/30/1997 8:14:00 PM
From: Elmer	Read Replies (2) \| Respond to of 61433

Glenn, The delay in reporting earnings is very strange but sometimes you can read more between the lines than is there. I may have done that on something else I saw that resulted in my buying a position in the stock yesterday. Let me explain. This week I picked up Fortune Magazine's Investor's Guide 1998. One of the articles featured a joint interview with John Doerr, Mary Meeker, and Roger McNamee. Now Doerr and McNamee are affiliated with Kleiner, Perkins, Caufield and Byers ("KPCB"). It's a very successful venture capital firm that did the venture funding of ASND. Based on the most recent information I've seen, KPCB owns about 10 million shares of ASND through its different investment partnerships. In the interview, Doerr recommended purchases of Citrix Systems, Netscape and Sun Microsystems. KPCB partnerships own big positions in the first two. Similarly, McNamee recommended (among others) Rambus and MMC Networks. These stocks are also significant holdings of the partnerships. McNamee is quoted as saying 3Com and Sun are incredibly cheap right now. So my question is, why didn't Doerr or McNamee, who are ultimate insiders, recommend ASND, which is also cheap right now? After all, KPCB at last count owned about $220 million of the stock, a big number even in Silicon Valley. Why not recommend the stock if nothing but for selfish reasons? After all McNamee recommended the stock at higher prices in an April 28, 1997 interview in Barrons' and again in the more recent July 1997 special technology issue of Worth Magazine. So why ignore it at bargain prices in the current Fortune interview? I can think of three reasons. The first is that they believe that the stock isn't going to do well in the future and don't want to be remembered for recommending a dog. It's possible. They both have good reputations. The second is that they like the company but its not a top pick and it didn't warrant recommending given the large number of other good stocks they are thinking about now. It's also possible. The third is that Doerr and ASND management are trying to sell the company, are in a quiet period, and need the price to stay depressed to attract a buyer. I started by saying that sometimes you can read more between the lines than is there. But that's why I bought. What was hard was the Goldman Sach's downgrade. That firm corrected called the Oracle earnings shortfall. So they have been good. But the downgrade was like kicking this company while it was down. I don't know how the Goldman analyst is going to have a working relationship with ASND management going forward unless they wanted the downgrade. And it seems like Goldman was one of the few houses that still had a positive view that could be downgraded. Sorry if this sounds like a big conspiracy, but it just doesn't make sense to me to not pound the table in the Fortune article for one of their biggest holdings. That is unless another buyer has been lined up and he wants a very low price. Hope I right, David