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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: jeremic who wrote (11888)	7/3/1998 4:14:00 AM
From: Eric Goethals	Read Replies (1) \| Respond to of 21342

There has been quite a lot of talk lately that a westell buyout is imminent. I don't believe we will see a merger or buyout anytime soon for a few reasons: 1.) ADSL deployments have not started, we all know it won't be until late 1999 before anything really gets under way that will have an affect on bottom lines What is your reasoning behind this statement? Just because deployments have not started does not mean one company is not valuable to another. Right now Westell is having trouble with deployments. Are they seeing a grim future? If so they should sell out now. 2.) 'The bronze coin family' as the good doctor describes them would be fools to sell now when westell has the most potential BUT not a lot to bargain with Who says Westell has the most potential right now? Alcatel is willing to give their product away free if they have to and has been. (I contend that Westell cannot produce product at a cheaper price than Alcatel. As far as I know Alcatel is not dependent on anybody). Only the board members know what the potential is right now. Fools you call them? I doubt it. It's a matter of information they have that we don't. 3.) Westell has enough cash to last 6-12 months without significant revenues, which falls in line with when deployment should be accelerated significantly Let me put it this way, they have enough cash to last another year, why sell now when there is the DMT BA contract looming, BT, etc Maybe they know who will have the contracts already. ...the price they could get now won't be much worse a year from now, the returns by waiting are enormous without much downside. Westell was worth more last year than this year. If westell gets a few more contracts, then they have bargaining power if a buyout is considered-or better yet, they exist as autonomous leader in this burgeoning sector. Amati saw something in the market and bailed on their business, then bailed on Westell. They saw it better to get out of the bandwidth provider business. Apparently the marketplace risk was too high. I have a feeling Westell may be seeing something similar and feels they will need help. Only the board members will know if they are worth more now than in 12 months to come. As I have said before, Westells clock is ticking.

To: jeremic who wrote (11888)	7/3/1998 9:23:00 AM
From: Zephod	Read Replies (2) \| Respond to of 21342

>>I don't believe we will see a merger or buyout anytime soon Jeremic; No talk around the ol' coffee machine this time hey<G> I'm going to second the points Eric raised. I think Westell's problem can be summed up in 2 words "pricing pressure." I don't see how Westell can compete with Alcatel in this respect. You mentioned Bell Atlantic DMT, you know ALA wants this contract, might not be the reason DSC was purchased but you can bet it entered into it. If Westell makes a solo bid low enough to secure the contract will they make any money on it? Cisco is also going to be in there aggressively bidding on this contract as well, I think the US West contract was part of the reason Netspeed was purchased. Pairgain, COMS, ERICY, they'll all be there trying to get this contract. The ONLY way Westell can compete with the likes of ALA & Cisco is with the help of deep pockets like Lucent. You mentioned there wasn't much risk in waiting, not much downside, imagine where Westell would be a year from now if the lose BEL DMT & BT to ALA. ALA is in trials with BT as we speak, where would Westell be if FTEL/WSTL get an initial CAP contract and ALA ends up with DMT. The purchase of DSC by ALA is a direct threat to Lucents dominance in the DLC market. Westell has IP to assist Lucent in their fight with ALA in this market, IP which can be used against them if ALA were to purchase Westell. There are other market factors Dr. Tech mentioned as well that put Westell in a near term position where they have some leverage to negotiate a favorable deal. I think the ALA purchase of DSC changed the DSL landscape and not in Westells favor...Can Westell make it on its own?...We'll have to put our faith in the board & trust they'll do what's in the best interest of shareholders. IMO now might be the best time to get big brother to help fight some of these bullies. I think you're going to see a deal announced before BEL DMT. Dave