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

To: tepli who wrote (48951)	6/18/1998 10:39:00 AM
From: Saul Feinberg Jr.	Respond to of 61433

Ascend should buy MRVC to augment its value to a takeover suitor. MRVC is a fast-growing profitable LAN and fiber-optic presence that will augment Ascend's takeover value. At today's prices, MRVC is so cheap (16 times this year's EPS), growing at 40%, with no legacy products to support(unlike COMS and BAY). MRVC can add 25% to its revenues and a lot more than 25% to its takeover value! Plus MRV's fiber optics expertise is so advanced only Lucent and Ciena may arguably have the edge.

To: tepli who wrote (48951)	6/18/1998 10:42:00 AM
From: The Phoenix	Read Replies (2) \| Respond to of 61433

Random thoughts... ERICY must by something if they want to be a player in the communications market. However, they will probably buy the company that best matches their core competencies. It seems to me they are more infrastructure/service provider competent than they are "Palm Pilot/consumerware" oriented. Given this I would say, strictly fundamentally, that ASND is a better fit for ERICY than COMS.....again, if they want to get into the communications market. Another point which was made earlier was product lines. COMS has a broad product line, targeting multiple markets, via a number of different channels. THis is much more complex to manage and assimilate than a targeted narrow product line company like ASND who enjoys good market share and mindshare. And, once again, the channel ASND targets is synergistic to ERICY's. Final thought for the morning. Is ASND better off alone and filling out their product line? Can they leverage their current successful products? Current ATM/FR products are in a high margin market, therefore filling out the product line will only cost money and bring down margins....more and more effort for less and less gain. Still, if the executive team is confident they can continue their success by either growing market share in current markets or product line extension then they'll only sell at a high premium feeling that they can get to 65-70 on their own in a short period of time. However, if there is any concern regarding competitive pressure or aggression (note Cisco's announcement of new ATM switch products), and a lack of desire to go it alone then they may be willing to sell and get out for something less. Could we be toppy at 50 suggesting a purchase price of <60? Still a nice little gain... HEY PETE...<eom> doesn't look like we're going to make it ;) OG