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Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: CHIP HUNTER who wrote (2026)	1/29/1998 8:46:00 PM
From: Dave Dickerson	Read Replies (5) \| Respond to of 7342

To all-I want to give you my version of why Tellabs went down $7 in 2 days recently at the same time that it beat projections by $.02. Sound view issued a changed statement about Tellabs and then Joe Bellis at ML downgraded Tellabs from 1.1 to 2.3,which is long term neutral. Look at Smartmoney's comment on his action "some analysts made statements about tele.egt.cos.spending slowing because 1-2 cos. (ADCT ) came up short on earnings, and extrapolating it irresponsibly to include all cos. in sector". This was based on his view that RBOCS were going to cut back on capital spending. In '96 RBAC spending was very flat, but Tellabs Titan sales were up +54%. Now we get to the mechanics of how this -$7 move came about. My source is a (very well experienced) ex-ML broker comments to me. Many momentum mutual funds like Fidelity,AIM,Putnam, and Mass etc. have automatic computer trading programs that have a major component of ML ratings of stocks. So when ML goes to a 2.3 rating, their computer reads that as sell Tellabs. The trading volume was 13 million shares (7x normal) on that first day when Tellabs went down $5, in the second day other TA traders, like Chip, climb on board to continue the selling. It's only later, when the fundamentals are focused on,that Tellabs does a turn around. This was a buying opportunity for knowledgable bulls. DAVE DICKERSON