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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Andrew who wrote (5158)	6/15/1998 10:40:00 AM
From: Doug	Read Replies (1) \| Respond to of 18016

Andrew: Thx for a frank exchange. It is obvious that the market does not consider that the so called 100's of millions over several years is meaningful to the growth of a $1.6b Company. In-fact,some may find that language more resonant with hype than fact. In making a valuation ,descriptive words like suggested,seems and beliefs are not meaningful and therefore carry no weight. Companies proceed with a diversification to ensure that their Income statement grows and is less liable to fluctuations. Contrary to expectations, after the takeover, NN's Income statement showed more fluctuations and a decline in Net Income. The case I make is that the take over of UBS was motivated by a need. The take over did not result in the need being satisfied; in-fact it led to a loss of some Assets due to a partial write off. The question still remains "What must be done to satisfy the need which the UBS strategy failed to fill." It would appear that your hopes are now pinned on Alliances. 3COM itself is faced with product transition and competition for its full range of products. It is for this reason that its price has ben lagging the market. Though it has a very large marketing Force, its operational costs are high resulting in low margins. I am not aware that there are many Companies that have shown growth thru Alliances. I rest my case with the proven fact that the established means of growth is thru increased Sales and or Acquisitions. If Alliances were so lucrative, the number of Take-overs would be far less. Many Boards are completely swamped with Investors more concerned with an analysis of Technology and its micro details. The attention paid to the analysis of the Overall business of the Company is given little time. I believe Investors would do better if they focus on the valuation of the business rather than speculate on the effects of every tidbit of news. Regards.