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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: The Phoenix who wrote (8935)	1/14/1998 12:59:00 PM
From: pat mudge	Read Replies (3) \| Respond to of 21342

[WSTL valuation] The bottom line is at this valuation is WSTL a takeover target??? You've asked some good questions. Those on valuations I'll let bill and others answer. My bias is that Westell made a strategic error when the market began endorsing DMT versus CAP and they appeared to ignore the warnings. They signed with MOT for CopperGold (repeatedly held up) and then attempted to buy Amati. What will it cost them to shift to DMT and what write-offs will be involved should CAP not be widely installed? These are questions I can't answer. I've heard they're a likely buyout candidate, but that's pure speculation. I know they shopped themselves around before the Amati attempt and I don't know what the response was. Perhaps someone else can add to the discussion. I've followed Amati carefully and only know Westell second-hand. Regards, Pat

To: The Phoenix who wrote (8935)	1/14/1998 4:27:00 PM
From: Trey McAtee	Respond to of 21342

gary-- the current capitialization is around 300 million i tihnk, actually higher but i dont have the exact number. as to competitive advantages, everyone is waiting for DMT chipset at this time, although i think ALA has them for its DSLAM now, not sure about their modems. most of the new entrants are working more heavily on CDSL (1Mbps ADSL) than anything else, mostly because they hope to drive it through by getting the consumers involved. the strategy may pay off, but i tihnk over time a RADSL solution will be the best bet. right now the only companies with major contracts in north america are PAIR, WSTL and ALA. pat or bill can keep you more informed about who is using whose chips and technology. i think PAIR is working with ADI for DMT, but i dont really remember. WSTL is working closely with TI and MOT, while ALA is licensing the patents, but i think making its own chips. one thing you didnt ask about is management...they arent much for working with us. IMHO, i would be very cautious about buying at this level. i dont think the downside is all that tremendous, but the potential upside is limited by managements lack of credibility. as for buyout, i have heard up to 2x sales based on current contracts (in other words they are using contracts that are signed but that may take 4 years to fill, and that we may not know about). the price i have heard repeatedly is around $40/share, mostly from some M&A people i know. steveg and bill worked up a PEG analysis based on all the information that is available to us. i think the sell price based on that was $16/share. take into account though that there are positives and negatives to which we here on SI are not privy. to steveg--thanks for WCII. good luck to all, trey