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Technology Stocks : Cabletron Systems (CS: NYSE) -- Ignore unavailable to you. Want to Upgrade?

To: Larry J. who wrote (4473)	7/19/1998 4:14:00 PM
From: starpopper	Read Replies (1) \| Respond to of 8358

Sorry Larry if I indicated that the NETVA deal is falling apart...that is NOT the information that Harold and the Captain have come across! I only referred to NETVA because I think there MAY be a chance of CS dipping a bit on the news, but NETVA would surely dip as well, maybe even increasing the %discount to CS that it currently maintains thereby allowing you a better chance to get CS at an even steeper discount! However, there is also the chance that the discount could narrow as NETVA holds while CS dips. The news in no way concerns NETVA, except indirectly of course because CS is buying them. For the record, I own 4000 shares of CS at an average of $12.75 and this news will not change my mind about the bullish prospects for CS over the next 3-12 months! In fact, I'm counting on the news to allow me to pick up another 1000 below my last buy at $11.75! THIS NEWS SHOULD NOT SEND US INTO SINGLE DIGIT TERRITORY...SO RELAX AND GO WITH THE FLOW! Harold and Captain...please reconsider your position on sharing this info with the thread! At least share it with other threadsters you respect privately...no need to enlighten some of the $%#@heads that have a habit of conversing through insults! Sometimes it's best to stand your ground when it comes to these types, or they will wind up destroying a good thing! $tar.

To: Larry J. who wrote (4473)	7/20/1998 12:35:00 PM
From: BMcV	Respond to of 8358

Glad I spent the weekend on the beach not on this thread. Larry, with today's announcement (where's Roy?) of CS coming out with Netvantage's switch later this month, I don't see the acquistion in trouble. In fact, the speed with which CS has been bringing to market products acquired through acquisition reflects quite positively on management. YAGO switches were being sold by CS also within a month or two of the deal. It may be too soon to talk about a "new Cabletron", but how about skippy's (sorry CB) post that the new employees are getting lots of reasons to stay happy. That's a major difference from the old CS BS. The guy who installed my cable modem used to work for CS and talked about the experience rather darkly. It can not have been a fun place to work and we all know how important it is to give people positive reasons to for you now qualified people have so many choices. George, as far as the 10-q goes, I found one thing at least very encouraging. The official reason for CS's difficulties is that they've gone through a tough product transition from shared media to switched products. Two years ago, 70% of CS's revenues were shared access, now only 15%. And these numbers are reflected in the 10-q. Switch revenues GREW 27% to $200m while shared media fell 50% to $55m. Now shared media products are so small absolutely that even another 50% decline has relatively little effect on CS overall revenues. Last quarter (and last year even more so) the gain from switches was offset by the decline in shared access; now if present trends continue, switch growth should far outpace the drop in older products. CS claims that they've made the transition early, presumably because the competition had the marketing presence to stay with older solutions longer. The software-based routers are apparently so much slower than the hardware-based switches acquired through YAGO that vendors will be forced to come around, despite the gorilla status of the largest seller of software-based routers. In three years Craig said independent market research says the switched market will be nearly as big as the software router market now ($9bn vs $10bn) and that they are the first ones in the space. See Yahoo post 7095 for some good discussion of this. The argument some have made on the Yahoo board that "technology doesn't matter" compaared to marketing is absurd when the performance difference is so huge. This is not Betamax vs VHS, or even Apple vs PC. It's more like jet engines and steam power--no comparison. One last thing from the annual meeting, looking over my notes from John D'auguste's presentation. He said, "We will not lose on price." One phrase tossed around a lot was "zero profit margin orders". The goal here seems to be expanding market share at the expense of profit margins. Then he said, "We will not take an order that loses money." This was in reference to his "PC mindset" ie very short product cycles and absolute attention to efficiencies in the manufacturing process. Together, you have a strategy of pushing market share and at the same time avoiding loss through manufacturing efficiencies. Not to start rumors, but it sounds a lot like Compaq, doesn't it? Cheers, Bruce