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

To: Jan Crawley who wrote (44585)	4/16/1998 11:55:00 AM
From: Tim Luke	Read Replies (1) \| Respond to of 61433

Jan, Be careful buying cd it could very well drop more tomorrow and stay there for a while. This is one stock I would not want to own over the weekend. There is way to much risk trying to catch a bounce on this one. good luck

To: Jan Crawley who wrote (44585)	4/16/1998 11:58:00 AM
From: Thomas M.	Read Replies (1) \| Respond to of 61433

...I have a small order to buy CD. Do not know anything about it... Think about what you just wrote. Tom

To: Jan Crawley who wrote (44585)	4/16/1998 12:58:00 PM
From: Greg h2o	Read Replies (1) \| Respond to of 61433

OT*** Jan, how can you buy a company (CD) that is trading at 95x earnings without finding something out about it first? I'm not trying to be flippant... just trying to assess the market psychology. thanks, greg

To: Jan Crawley who wrote (44585)	4/16/1998 1:18:00 PM
From: Greg h2o	Respond to of 61433

OT*** for those looking at CD...here is a summary of Robbi Stepens report from this a.m...: Key Points: ú 1997 EPS are being restated down by $0.11 to $0.13 ($100 to $115 million ) to reflect serious accounting irregularities in the membership business. ú An investigation has just been launched. The full facts will apparently not be forthcoming for a month or two. ú We suggest that former CUC management may have not disclosed the amortization of marketing expenses for some of the membership operations while booking revenues up front. This fits with the company's indication that approximately 2/3 of the adjustment is non-cash. That still leaves open questions of the cash charges. ú The news would be far worse, in our view, if there was any indication of any shortfall in revenues or in the underlying revenue growth rate of the membership business. ú We are lowering 1998E EPS to $1.15 from $1.30 to reflect growth from a lower base of profits in 1997. We also assume the stock-based acquisitions will not close. ú The company still plans to report Q1 on May 5 th and firmly indicated it expects to meet or exceed estimates of $0.25 in EPS. ú We are shocked by this and expect the stock will be slow to recover. However, we see no reason to doubt the value of the underlying businesses, although the restructured management team now has to prove its ability to consolidate the business. As such, we are lowering our rating on the stock to Long-Term Attractive from Strong Buy. SUMMARY: During the transition of accounting responsibilities from former CUC management to new HFS management, questions arose regarding potential irregularities in the accounting for the membership business. Cendant announced it expects to restate its annual and quarterly net income and earnings per share for 1997 and may restate certain other previous periods related to former CUC International businesses. Cendant expects the restatement to cut 1997 earnings by about $100 million to $115 million, or 11 cents to 13 cents a share before restructuring charges, and it expects 1998 earnings will be reduced by about the same amount from current levels. The company had 1997 EPS before restructuring and unusual charges of $872 million, or $1 a share. Until Cendant completes a full investigation over the next four to eight weeks, we will not have all of the details. It appears that the situation could involve serious litigation against former CUC officers who may have been involved. We would not be surprised by more resignations. For reference, Chairman Walter Forbes was not on the conference call.