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Technology Stocks : FORE Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Ed Frye who wrote (8553)	5/10/1998 5:21:00 PM
From: Bald Man from Mars	Read Replies (1) \| Respond to of 12559

<< Possibility? Always. Probability? .001 >> Professor, why do you give such a low probability ??? I might exit Monday if you are out of it and give such a low probability of takeover ...

To: Ed Frye who wrote (8553)	5/10/1998 8:53:00 PM
From: Dave Doriguzzi	Read Replies (1) \| Respond to of 12559

Ed, I hate to put you through this because I do value your opinions but sometimes I just have to disgree. A buy-out now still has a chance and I think the number would be in the $35 range and I do think its more than .00001 Good Investing! To: Dave Doriguzzi (7569 ) From: Ed Frye Sunday, Mar 8 1998 12:25PM ET Reply # of 8556 Hi Dave - My initial reaction to this statement was the same as yours but FORE's resounding thud on Friday - a good market day in general and a good networking day in particular - got me thinking some more...... The market has consistently valued FORE @15 +/-1 since late summer. Based on $0.30 EPS, PE = 50:1 this FY. Next FY, EPS = $0.60, yielding a 25:1 PE. Perhaps the market is right, perhaps FORE is currently properly valued @15. Last Q report was good but did not materially change anyone's views of FORE's prospects. And i don't think making their # this Q or beating it by a penny will have much effect either, and after that the competition from GigE will heat up, not to mention the threat posed by INTC entering the market. It is instructive to look back at the ASND/CSCC/TLAB/NNs of the world and ask what got things going for those companies. The answer is a great new big ticket product that blows away the competition for a year or so at least i.e., everyone believes there is no real substitute in both price and capability. Thus far, FORE's products, though marginally technically superior, haven't distinguished themselves as marketplace blockbusters. FORE could disappear tomorrow and the world could easily find satisfactory substitute products. Not true for TLAB's digital cross-connects, NN's MainStXpresss, ASND's MAX TNT, CSCC's whatever, etc. I believe FORE's earnings growth can not significantly accelerate w/o FORE delivering a knockout product - and the stock price is going nowhere until earnings growth can be reasonably expected to significantly accelerate. Last i heard, their big new product release has been delayed till early '99. In the interim, we have to work off another 40% price cut. FWIW - My conclusion is FORE will not exceed earnings expectations in the forseeable future (next few Qs) by an amount significant enough to make a difference to the price of the stock. Thus, for 1998, this is a trader's stock 14 +/- to 16 +/-. Not what most of us want to hear. Dissenting/concurring opinions always welcome//ed To: Ed Frye (7570 ) From: Dave Doriguzzi Sunday, Mar 8 1998 10:11PM ET Reply # of 8556 I disagree with your assessment but that's the good thing about these boards. I, like you, believe that Fore has a pretty good base at $14. But I think the upside may break out for the following reasons: 1 Great comps on last year for this quarter. Last year only did $.03 2 Sequential growth is running > 10% for the last several and next Q 3 Stock has a low of $13.5 (other than the $10-$11 range for about a week + or -) since August 1994. 4 P/B, P/S, and other fundamentals are more reasonable than they have ever been 5 I respect MSFT's buying decisions and think the FORE/MSFT could yield additional benefits 6 Potential buy-out 7 Rumored big contracts 8 Still leader in the industry by ? (1-2 years?) 9 Think upside is 8 and downside is 2 for a 4 to 1 ratio 10 Stocks move before you think they will. As they always say "nobody rings a bell at the bottom or the top!" Good Investing!

To: Ed Frye who wrote (8553)	5/10/1998 10:41:00 PM
From: Greg Jung	Respond to of 12559

Under current operating conditions, when Fore is at $18 it is valued at 30x next year's earnings. Corresponds to a fixed finance model with 30% sales increases (low end market estimate). The kicker that can be upping the ante is the expectation that these products can be sold with a 15% or better net margin. So that can take us to $27. Lack of insider earnings dilution (lately, anyway - I don't know what the general policy is: the typical options pricing may still be above market price, and we may see an increase in shares outstanding as the price rises and insiders cash in). Greg