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Technology Stocks : PairGain Technologies -- Ignore unavailable to you. Want to Upgrade?

To: appro who wrote (23039)	4/17/1998 1:19:00 PM
From: David Nelson	Read Replies (1) \| Respond to of 36349

Thank you for your kind words. I'm still in watch mode on CD. I suspect that the market has overreacted to this news since there is no visibility to the extent of the accounting problems yet. The co. lost almost 50% of its market cap in 2 days, but so far the accounting problem appears to be only related to a portion of CU's profits. I'll go as far as to say that CD will probably see $40 before PAIR will, though, ==Flame== ==Flame== ==Flame== since PAIR's growth prospects over the next year are limited (as perceived by the street) whereas CD is aggressively on the acquisition trail in a like manner to WCOM. PAIR's biggest problem is not PAIR itself but the street's perception of DSL going forward, and where PAIR will eventually fit into the scheme of things. PAIR's hottest new market, vis. ADSL, has been growing, and new competitors have entered in droves, while its HDSL market growth has been shrinking along with its pricing power due to ADTN and others. Furthermore, the street sees the RBOCs as moving ever so slowly toward ADSL and leaving huge chunks of the market to cable cos. Now while this is not relevant to PAIR's current market and revenues, the street is looking forward and feels that PAIR will be left only with the scraps. PAIR's growth rate is declining while it's major competitor's growth rates are growing rapidly. The lion's share of all new contracts and revenues are being awarded to LU and CSCO. Lucent and Cisco are PAIR's most formidable competitors, going forward and investors are awarding these cos., and continuing to punish PAIR. Interestingly, most posters on this thread seem to focus on the small fries, AWRE, WSTL, ADTN, etc., and are ignoring LU and Cisco, PAIR's biggest threats. CD is perceived as an aggressive growth co., while PAIR is viewed as one of many in a highly competitive environment. I will continue to trade PAIR on its volatility, and I believe that PAIR still has a promising future, but I believe that after the dust settles, CD will reward investors handsomely going forward, while PAIR will continue to languish until the ADSL market starts to move forward. I don't know how long this will take but the RBOCs don't appear to be in any big hurry yet. --Dave