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Technology Stocks : Advanced Fibre (AFCI) ** IPO -- Ignore unavailable to you. Want to Upgrade?

To: Milkman who wrote (303)	2/3/1998 2:27:00 AM
From: nghi vu	Read Replies (1) \| Respond to of 3299

thanks milkman and clam clam for elaborating on Digi. My guess on the increasing likelyhood of LU buying Digi when the stock is in the tank - cheaper and less dilutive to current LU shareholders?

To: Milkman who wrote (303)	2/3/1998 10:18:00 AM
From: Clam Clam	Read Replies (1) \| Respond to of 3299

Lucent has accounting issues regarding mergers (they can't do a merger without incurring substantial amortization - which is basically accounting non-cash expenses which hurt EPS). They could not afford AFCI at AFCI's current multiple and assuming a decent premium. DIGI is cheap enough that they could do it. DIGI is a wanted company but you are right, they have baggage that some companies don't want to deal with. TLAB has been considered an acquirer but I doubt they want DIGI's transmission equipment. Nortel hasn't been an acquirer so that seems unlikely. There are reasons why Cisco might want to buy them and Cisco is so good at mergers I doubt their stock would be punished for a deal there. That would really get Lucent's attention. Lucent is now CSCO's chief rival so that would send a shiver down Lucent's spine.