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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: Mang Cheng who wrote (5440)	4/18/1998 11:31:00 PM
From: Gianluca Bacchiocchi	Respond to of 6980

For those of you that follow the Ascend thread, you will have already seen this article on Bay that is quite informative. Here it is again. Bay still on high-speed track By Ben HeskettStaff Writer, CNET NEWS.COM April 17, 1998, 12:30 p.m. PT URL: news.com Despite a tepid embrace of Bay Networks' initial efforts into new high-speed markets, the company will roll out plans to continue targeting networking equipment for this sector at the upcoming Networld+Interop trade show in Las Vegas and beyond. The company, fresh off the announcement of poor earnings for the quarter, will seek to take the next steps in support of gigabit-speed Ethernet technology by tackling new segments and updating existing offerings, according to sources. Among the items on the table at the networking industry's largest annual gathering will be a new Accelar workgroup switch 1050 that will be targeted at departmental needs, sources said. Along with the new box, Bay will announce support for a variety of software features, such as advanced routing extensions and IP multicast technology across the Accelar line, they added. Later this year, Bay also plans to add gigabit-speed links to its BCN line of routing devices and System 5000 "all-in-one"-style back-end system. A Bay spokeswoman refused to comment on upcoming announcements. The rollouts come as executives from Bay admit that initial adoption of Accelar products has not been up to expectations so far, leading in part to a downturn in the company's financial fortunes. With finalization of a standard for Gigabit Ethernet on its way, however, analysts remain bullish on the prospects for the market. Gigabit Ethernet offers higher speeds for what is the dominant technology for connecting PCs to servers on a network. With the advent of this technology, the company will be able to move beyond current market niches to tackle high-end networking needs, according to most industry pundits. On the ATM (asynchronous transfer mode) side of Bay's business, the firm will add higher densities to the Centillion line of equipment and incorporate a new multiprotocol routing "engine" for the System 5000 BH, a model that includes Centillion technology. Separately, the firm will formally announce a new gateway on Monday that provides an IP (Internet protocol)-based bridge between voice and data networks. The new Voice Gateway 4000, which was disclosed to CNET's NEWS.COM earlier this month, hopes to take advantage of current interest in voice-over-IP technology. The new gateway takes advantage of software technology Bay gained from an equity investment in NetSpeak. It will ship immediately with prices starting at $1,500 per port. Density for the gateway starts at 24 ports and extends to 96 ports. The 4000 represents Bay's first product in the voice-over-IP market. The company's 5399 remote access concentrator will also soon add voice as well as fax-over-IP capabilities. Go to Front Door \| Intranets \| Search \| Short takes \| One Week View Get fast answers at the new Snap! Copyright c 1995-98 CNET, Inc. All rights reserved. Privacy policy.

To: Mang Cheng who wrote (5440)	4/19/1998 2:23:00 AM
From: rupert1	Read Replies (3) \| Respond to of 6980

Mang: Touche! However, my thinking was based on information provided by the company. On that basis I profited from a share price that went from 15-26 (when I sold, you having already sold at 21 for a loss, I think, then you bought into 3COMS which then plummeted) and we were both wrong since BAY went on to 41: I then bought and sold BAY several times profitably while your charts were apparently telling you to sit on the sidelines. Your charts apparently missed the fairly recent moves from 24-35 and the move from 24-30. After the warning and now after the revelation of BAY's miscalculations your charts confirm what we already know. Your more recent "script" on Thursday evening, after results, that the share would go to 22 and then bounce to 28 and from there to 24 and back to 28 or whatever, came after I had posted that it would not melt down and would return to a trading range of 25-28 by May, if not sooner. I gave a fundamental reason namely that the June quarter is seasonally strong and even with the poor March results the stock was going to be perceived as worth those figures. I also suggested that some of the poor results was already factored into the share price. At that time the majority on the thread were saying it would melt down the next day to as much as 14 and certainly 20 or under. Your last post restates that although the charts merely reflect what we already know even then they are vulnerable to misinterpretation. I think the most extraordinary idea in your last post is that anyone who actually invests, is somehow too involved to think clearly, even relying on charts. Well, there may be some esoteric pleasure to be derived from plotting charts on a not-for-profit basis, but I am more interested in making money. The morale? Fundamental analysis is certainly vulnerable to the quality of the information available from a company, together with what is known in the market. But, on the whole, it provides a more rationale approach to forecasting than charting which, at best, gives an ambiguous, symbolic, rear-mirror interpretation of what has already occurred. (In the case of BAY, those on this thread and elsewhere who were skeptical of BAY's PR, were more right than those of us who believed it. But did they actually know smething to support their skepticsim or were they just expressng fears, and if their skepticism was well-founded, did they sell?). To say, as you do, that your charts are telling you that the near future of BAY's price depends on what the market does in the next session, makes my point. As I read what you say, the price may now breach what you said two days ago was the unbreachable $22 level and may go lower unless it goes higher. Very clear! I believe that support for BAY at the $22 level is strong, but the level should not be interpeted too rigidly and short-term intraday movements to the 20's is possible while still maintaining $22 as a significant reference point. I think this provides opportunitie for short-term trading, but only if you have a belief in the fundamentals of the stock. I don't think it is possible to predict the very short-terrm price movement because we are still in the wake of the extraordinary high volume, there will be reactions and counter reactions to short-covering and option expiry, and the whole market is vulnerable to a major slew of earning releases next week and the following week; there is also some slightly increased concern about interest rates and the perceived over-valuation of the market and an almost tangible wish among some for at least a modest market correction. In this scenario, BAY will be in choppy waters unless it can drip-feed the market with positive information about new products and the pick-up in Accelar and other product sales. Now much chastened by the failure of House and co to provide reliable information a month ago (if not sooner) I can still say that if information on June revenues is positive in mid-May or thereafter, then we would see a sustained rise in the share price. But this scenario has been made more problematic because House's credibility has been damaged and the market will want to see the money, this time. I, myself, am more sceptical - I was not impressed by House evident discomfort about predicing 10% increase in revenues for the June quarter and his statement that sales in the first two weeks of April were good (but in a tone of voice that suggested they were not very good). This could be interpeted that House was actually expecting more than 10% but was reluctant to be caught out again, or it could be interpreted the other way. In general, given the recent miscalculations, I am concerned at the lack of data or the absence of a rationale for this prediction beyond saying that it will be a seasonally strong quarter, that there would be some improvements in margins and that new products would start contributing to the bottom line and that Accelar has a 50-75% conversion rate from evaluation models to sales (a fairly wide margin of error and not as impressive as House seemed to believe). I think the situation is poised for another warning at the end of May or a blow-out based on fast sales of Accelar. We don't know and neither apparently does House. He, like most of us, hopes and expect the latter not the former. In this context your charts are meaningless. Rational analyis strongly suugest that the slam-dunk marketing ploy that BAY needs to move its very good products quicker than it is doing now is consolidation with a company which has wider penetration. The consolidation of other networking companies may leave BAY high and dry. It is possible that BAY will want to be the acquirer, but its depressed share price has probably ruled that out for this year because it doesn't have enough cash. The case for a takeover has been strengthened by the recent results. Even if there is no takeover, I think speculation about it will become very serious from now on in and especially in the August-October period (if it has not already been sold) as the market prepares for a Lucent move and as Lucent's competitors size up the prospects. Personally, I would expect to have bought and sold Bay a few times by then and hope that I happen to be in big if and when the takeover comes. At these price levels movements of $1-2 can be very profitable: it only takes four or five trades to gain the eqivalent of waiting for it to go from $24-34. Failing that, I think long holders will see their money double in 12 months if BAY continues to exist alone, and that it will make at least $35 if taken over within the year. I'd be most interested to know what your charts tell you about similar periods to those that I have discussed. Victor