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

To: gbh who wrote (49070)	6/19/1998 2:53:00 PM
From: gbh	Read Replies (1) \| Respond to of 61433

Small networking stocks surge By Binti T. Harvey, CBS MarketWatch Last Update: 01:46 PM June 19, 1998 Also see: Tech Report NEW YORK (CBS.MW) -- Smaller networking stocks bounced Friday as investors, infected with merger fever, wondered which company will be snapped up next. The frenzy was fueled by a report in The Wall Street Journal reporting that Swedish telecommunications equipment maker Ericsson (ERICY) is interested in purchasing an inexpensive data network equipment manufacturer. Tellabs (TLAB) gained 1 to 64 5/16, Xylan (XYLN) added 1 1/8 to 27 1/8, Newbridge Networks (NN) rose 7/16 to 22 1/4 and Shiva (SHVA) rose 3/4 to 9 3/8. PairGain Technologies Inc. (PAIR) shot ahead 14 percent following an analyst's upgrade and takeover speculation. Volpe Brown Whelan analyst Timothy Savageaux raised the network equipment maker to "strong buy" from "neutral," citing its potential as a takeover target. Savageaux believes PairGain's technology and relationships with Baby Bell companies make it a ripe prospect for acquisition in the current merger frenzy permeating the industry. Lower profit Nevertheless, Savageaux cut PairGain's earnings estimates to 16 cents from 18 cents for the second quarter, 70 cents from 75 cents for fiscal 1998 and 90 cents from 95 cents for fiscal 1999. Savageaux attributed the reductions to additional price competition in the market. Even as their smaller rivals surged ahead, 3Com Corp. (COMS) and Ascend Communications Inc. (ASND) were in negative territory. Many analysts believe these mid-sized networking companies will not be considered for acquisition because they are too expensive and too large to integrate easily. In this environment, bigger isn't always better.