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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: John Biddle who wrote (12431)	2/13/1998 2:26:00 AM
From: sepku	Read Replies (4) \| Respond to of 77400

YTD performance of selected network stocks through Thur., 2/12/98: (courtesy of Gary Korn on the ASND thread) Stock 12/31/97 02/12/98 %gain(loss) SHVA 8 9/16 11 7/8 38.7 ASND 24 1/2 33 13/16 38.0 XYLN 15 1/8 20 3/4 37.2 MADGF 3 7/8 5 1/8 32.3 BAU 25 9/16 31 13/16 24.4 LU 79 7/8 94 7/16 18.2 MRVC 23 7/8 28 17.3 CSCO 55 3/4 65 1/4 17.0 FORE 15 1/4 17 3/16 12.7 XIRC 10 1/16 11 1/4 11.8 CS 15 16 5/16 8.8 TLAB 52 7/8 56 13/16 7.4 NT 44 1/2 47 3/4 7.3 PAIR 19 3/8 20 11/16 6.8 NWX 277.83 296.15 6.6 WSTL 12 3/4 12 7/8 1.0 COMS 34 15/16 35 1/4 .9 NN 34 7/8 22 5/8 (35.1) --------------------------------------------------- Good thing none of you CSCO fans took me up on my gentlemen's bet at the start of the new year. I stated that in my opinion, between CSCO and ASND, the latter was the superior investment based on risk/reward and % returns for 1998, based on value. I even mentioned that I further believed that ASND would double CSCO's returns for the year. Looks like I'm in pretty good shape so far. Considering none of you uttered a peep at the time, I take it you all suspected I would right. Oh, but I'm way outta line! It's only halfway through Feb, right? ;o) Style Pts.

To: John Biddle who wrote (12431)	2/13/1998 2:56:00 AM
From: Eric	Respond to of 77400

John I agree with you. Chambers is pretty nimble, if he was not I would start to get very worried! Very bullish, short and long term. regards Eric

To: John Biddle who wrote (12431)	2/13/1998 5:38:00 AM
From: Zoltan!	Read Replies (1) \| Respond to of 77400

Forbes has a new article (2/12) on why ASND was/is such a mess: here's an excerpt: To continue its breakneck growth, Ascend began looking for ways to start to sell networking gear to the big telecommunications firms, the "carrier market." Only one problem: quality control. Ascend's products were notoriously unreliable. This didn't matter so much when they were selling to mom-and-pop Internet Service Providers (ISPs), but it was completely unacceptable to bigger, more established companies. Only one problem: quality control. The way around the problem was to buy Cascade, a traditional carrier market supplier with a solid reputation. "Ascend was shipping primarily to ISPs, themselves startups. And the ISPs wanted product as soon as it was available. They didn't really care if it was finished or not," says Ashby. "But those ISPs are no longer startups, they have become big companies and in some cases very big companies. They can no longer accept products that are not extremely reliable. At the same time Cascade was selling to the carriers and they want 100% reliability." Buying Cascade made a lot of sense on paper, but it quickly turned into a logistical nightmare. Ascend could barely manage its own growth, let alone digest another fairly large company located on the other side of the country. The results were ugly. The day the merger was announced Ascend's stock dropped 11 points. Cascade employees fled. Ascend couldn't hire enough engineers to complete projects on schedule and products were shipped prematurely, full of bugs. Revenues suffered and so did the bottom line. In the third quarter of last year Ascend missed Wall Street earning estimates by more than ten cents a share (see Spare a dime, brother?) and the stock was pummeled. Blame, blame everywhere but not a drop to . . . jabat, who according to our estimates earned over $14 million last year, doesn't want to point the finger. "We had a bad quarter. I can't blame it on anyone. We just didn't execute. You can always find a lot of scapegoats. I just don't like to do that." Perhaps Ejabat is avoiding the most obvious scapegoat of all--himself. After all he was the guy running a $6 billion company in market cap without an annual budget. Is he over his head? By background and training, Ejabat is an engineer and an operations guy. He joined Ascend way back in its videoconferencing days as employee number ten, vice president of operations. Before Ascend, Ejabat was an operations executive at Micom Systems, a Simi Valley, Calif.-based networking company, now owned by Nortel. "You can always find a lot of scapegoats. I just don't like to do that." "Mory [Ejabat] is not one of the founders, although in many ways he acts like one. He is very technology oriented and really functions more as a chief technology officer than a CEO," says one analyst who wishes to remain anonymous. Ejabat was probably the perfect CEO for Ascend when its customers were primarily engineering managers at Internet companies. But Ascend's customers are increasingly large telecommunications companies, and even at smaller firms information technology decisions are now seen as too important to delegate. The nontechnical CEO is the new Ascend customer. Perhaps most damning of all is that Ejabat shows no signs of having the fire in the belly of, say, John Chambers of rival Cisco Systems. Maribel Lopez, an analyst at Cambridge, Mass.-based Forrester Research, sums it up succinctly, "Mory just isn't trying. I don't see any zeal." In an industry as competitive and changing as rapidly as computer networking, lack of zeal is almost as deadly as a lack of profits. On the block? The unstated strategy of top management at Ascend seems to be to sit back, bring in professional managers like Ashby to quietly patch up the holes and wait to be bought out. After all, almost in spite of itself, Ascend isn't doing that poorly. The company has worked out the bugs that plagued its latest products, and the Cascade merger is starting to pay dividends, accounting for nearly 40% of Ascend's fourth-quarter sales. All in all, the company looks to be on course to meet Wall Street's expectations for 1998. All in all, the company looks to be on course to meet Wall Street's expectations for 1998. And with $600 million in cash, great cash flow, an exploding industry and a stock price in the low 30s, Ascend looks tempting. Possible bidders could include big voice players like Lucent Technologies, Nortel and Eriksson who are interested in the convergence of voice and data networks. Even computer makers like Compaq could be players, as a way of moving into the higher margin network space. Ascend refuses to comment directly on takeover speculation. But asked how he would react to being acquired, Ejabat states unequivocally, "If the offer is right, I would not react negatively." forbes.com It's fairly obvious that ASND has run up solely on buyout speculation. That's their only hope.