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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Jan Crawley who wrote (42039)	4/2/1998 11:13:00 PM
From: gbh	Respond to of 61433

However, unless Asnd's coming earnings greatly exceed expectation, why should the price appreciation exceed $40 right now,this week?...unless the current buyout rumor is forcing the shorts to cover...What if the buy-out is indeed rumor only.... Jan, some thoughts to consider: 1) I tended to agree with your assessment about the $40 mark for ASND unless at least a .02 earnings upside materialized. However, my opinion has changed given other networkers have held there ground reasonably well in light of nothing less than earnings shocks. Hence, I now believe that "just meeting" expectations, coupled with a "cautiously optimistic CC" will be significantly rewarded in this sector. Now that may mean that post-announce, ASND simply holds its ground, whereas before I expected a mild correction for "just meeting" expectations. But in this market big money has recently been dumped into many "losers"; so "winners" will likely be amply rewarded. 2) There is certainly a degree a short covering taking place, but is this really because of buyout rumors or because of the realization that this stock just isn't a good short play any more. It seems over the last few days, any small dip has been met with strong buying; shorts covering? or bigs stumbling over each other to get in? 3) Buyout is just a rumor? How will this ever be validated. Will LU come out and state, "We are not interested in ASND". Maybe LU will buy BAY instead, or NN. But as you stated none of this will happen until October at the earliest. So the rumors will indeed persist until then. And even after then too. It seems a given that ASND will be taken by someone, sometime. I personally haven't put any credence in LU since they took Livingston instead. And I think many share this opinion. So any rumors are at least equally likely to be someone else anyway. I think Alcatel, Intel and IBM are more likely at this point. Just my two cents.