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Technology Stocks : Cabletron Systems (CS: NYSE) -- Ignore unavailable to you. Want to Upgrade?

To: Greg Strzegowski who wrote (2911)	2/8/1998 4:36:00 PM
From: kech	Respond to of 8358

Great post Greg- sure glad to know that knowledgeable networkers such as yourself are staying with CS.

To: Greg Strzegowski who wrote (2911)	2/8/1998 5:06:00 PM
From: Tiley	Read Replies (1) \| Respond to of 8358

Greg, Re: "Analysis of CS's prospects", Very good analysis Greg. I have a few questions for you. - You stated that most in the investment community think Don Reed is inept. What's the cause of such an impression? Surely it cannot be anything he's done at Cabletron as he has not been at his post long enough and the actions he's taken appear to be exactly what CS needs. - CS appears to have greatly strengthened itself in a couple of areas with the acquisition of DEC's networking business and of Yago. What are the areas they still have to address? - What are CS's offerings in the ATM area and in remote access and how do they compare with the competition? - Is CS doing anything to address xDSL, VoIP etc? - How does CS stand in terms of being an end to end equipment provider and is it a requirement to do so to be successful? Thanks in advance for your thoughts. I obviously think CS is a very attractive stock to own (and significantly undervalued) at present - and am very long, Best Wishes, MJ

To: Greg Strzegowski who wrote (2911)	2/8/1998 5:10:00 PM
From: blankmind	Read Replies (1) \| Respond to of 8358

thank you for a well reasoned and thoughtful response. 1. happy that they purchased yago so they can finally jump into routing, a market they missed and also enter the gigabit ethernet with what appears to be the top product. killing two birds with one stone, and the premium paid for yago should pay off in sales. the speed of the yago rollout showed real nimbleness for a company of cs size. for example examine csco and the their lack of a dsl solution after purchasing a leading dsl company. 2. wan - this is where cs should find growth, hopefully there products, oc48 planned for yago switch, atm, fr, ... but cs does not have the visibility in this area. cs continues to be viewed as an enterprise company. hopefully their branding campaign helps. 3. october surprise? it seems to be a given that lu will purchase a networking company in october once they can do a pooling of interest and also force other companies (nortel, cisco) to do acquisitions. pundits predict a shakeout of the network industry as convergence continues between the data and network companies. companies as bay, cs, asnd, shva, (you fill in your favorite networking company), have been speculated as targets. whether of not cs will be takenover, who knows, but cs does appear to be strengthening their product line with strategic acquisitions and looking at cost reductions. even if cs is not acquired, they position themselves to compete. 4. funny don reed's stock option price and the offer to yago, $35, in 18 months are very similar in price. i am going to extrapolate, please don't trash me to hard here, but this shows a lot of confidence in the fact that mgmt believes in cs upside, and have a plan to reach the level. 5. expect sales to increase, lu has supplied cs with 50,000 power modules for the switches, hubs,..., this is not the end of it. it is very possible cs tanked last quarters sales, to help manage growth going forward. point 5 will be developed further.

To: Greg Strzegowski who wrote (2911)	2/8/1998 10:40:00 PM
From: wbpfta	Respond to of 8358

Great post. How and where does Newbridge fit into the scenario you described?

To: Greg Strzegowski who wrote (2911)	2/11/1998 5:29:00 PM
From: Vladimir Zelener	Read Replies (1) \| Respond to of 8358

Hi Greg, Since I have a long position in this company I hope you are correct in your assesments. Nevertheless since everyone is just agreeing with you let me try to come up with whatever contrarguments I can scramble. 1. New CEOs both at BAY and CS true, but House can be credited with BAY price rising from $16 to $40 in October (before Networking cos suffered 30% decline) and firming revenues, at the same time CS stock price steadily declined from $45 to $13. 2.10% labor force reduction, true but they still have about 6000 employees, not including DEC labor force. With revenue of abot $1,300 mils a year it translates into $230,000 revenue per employee. I believe CSCO has $500,000 revenue per employee. I do not know what are the numbers for BAY and other networking equipment cos, but suspect they are better then CS. 3.Your model of CS shipping best LAN/WAN equipment by the middle of the year is based on the existing info for CS, BAY and CSCO and does not take into account the R&D and aquisitions the competitors might announce. 4.DEC will provide technology significantly faster then 1Gig per sec. I think it is a bit premature even to talk about it, since the transition to 1Gig is only at the very beginning. BTW DEC invented Alpha processor, claimed to be 5 to 6 times faster then Pentium and was not able to generate any sales with it. The end of the story I am sure you know: Intel now is the new owner of Alpha and I suspect it will be shelfed for life. 5.Finally, you did not take into account the interrelations between competitors. I think when BAY was suffering CS prospered (first half of 1997) and the improvement in BAY's business (and stock prices) spelled troubles for CS. Once again I hope you are correct and I am wrong, because I have a long position in CS.