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

To: Mighty Mizzou who wrote (51103)	7/31/1998 7:06:00 PM
From: Kenneth E. Phillipps	Respond to of 61433

I am not a techie but, My question is: Would the acquisition of Stratus give Ascend a significant lead over Cisco and Bay/Nortel in SS7 technology which Ascend would not otherwise enjoy? I found an article in the 3/17/98 edition of Internet Week which says that Stratus is the leader in designing the SS7 interface and the interface will "rely on the load balancing capabilities of the Stratus Intelligent Network Application". My question is whether Ascend would have access to that load-balancing technology without the acquisition and would the acquisition give Ascend a competitive advantage. Can anyone help with this. I thank you for the help. The article is at techstocks.com Ken

To: Mighty Mizzou who wrote (51103)	7/31/1998 7:17:00 PM
From: Mighty Mizzou	Respond to of 61433

Just say I DONT KNOW! This was the selling mentality today. Of special note is the Nutmeg Securities quote, a typical anal*ist, instead of saying "I dont follow the stocks" instead realizes he's got to show the wife tonite he was in the WSJ and says something absolutely brilliant. Duhhhh!!!! This article, in contrast with the Yahoo article, makes the WSJ look pretty weak! From tonites WSJ: Ascend Off 15% On Rising Talk Of Merger With Stratus By Christopher Grimes NEW YORK (Dow Jones)--Ascend Communications Inc. (ASND) lost 14% Friday as talk heated up that the networking company was looking to buy Stratus Computer Inc. (SRA). Some analysts and investment bankers groaned at the idea of such a deal, saying the two companies didn't fit. But talk on Wall Street persisted that there was indeed an imminent agreement. Earlier Friday, the San Jose Mercury News reported that Ascend would buy Stratus for about $800 million next week. Neither company would comment on the deal. "I dont think it makes sense," Andy Schopick, an analyst at Nutmeg Securities. "I don't think (investors) would be happy about it." The rumors surfaced Wednesday, as Stratus shares rose 20%. On Friday, Stratus stock rose 2.2% to 28 5/8 on volume of 2.1 million shares, compared with 364,000 shares. Ascend was off 7 3/8 to 44 1/8 on Nasdaq volume of 24.1 million, compared with 6.1 million. First Albany Corp. analyst Matthew Barzowskas noted that Ascend had been rumored to buy Advanced Fibre Communications (AFCI) a few weeks ago, until Ascend stanched the talk. "They're definitely looking to buy somebody," he said. Barzowskas said it would make sense for Ascend to buy a part of Stratus, but not the whole company. "Stratus does have some telecommunications software applications that could help Ascend," he said, "but the whole company could be a negative." Ascend had temporary problems digesting its last acquisition, Cascade Communications, which closed a year ago. But Cascade recently has become a strong part of the business. A deal with Stratus would have two likely results, he said. First, Ascend would lost its own status as a takeover target. And second, its growth would probably slow. Ascend was rumored to be a target of Lucent Technologies Inc. (LU) and L.M. Ericsson Telephone Co. (ERICY). Buying Stratus would be the equivalent of "going out and saying, 'We want to remain independent,"' Barzowskas said. -Christopher Grimes; 201-938-5253 -Mark Boslet contributed to this repor

To: Mighty Mizzou who wrote (51103)	7/31/1998 7:30:00 PM
From: Mighty Mizzou	Read Replies (1) \| Respond to of 61433

WSJ Options Report Options Report: Stratus Takeover Talk Has Traders Listening By Steven M. Sears NEW YORK (Dow Jones)--Professional options traders are starting to believe that Stratus Computer Inc., a computer-systems maker, will be acquired by Ascend Communications Inc., a data-networking company. Their loss of skepticism came Friday as the "smart-money" set began trading hundreds, or a thousand, call contracts at a time, compared to the 10-lot and 20-lot traders who dominated Stratus trading earlier in the week. Institutional traders who take big positions often have the best information of anyone in the market. The activity in Stratus was the exception to a slow trading day in the options market. Many money managers and traders are done hedging their portfolios so even the stock market's decline failed to start a buying spree of defensive options. Stratus' strength was even more impressive because of the stock and option markets weaknesses. Some single trades in Stratus' options exceeded average volume of 316 contracts a session. The stock gained 1 5/16 to 29 5/16. Ascend's stock fell 7 3/8 to 44 1/8 for reasons traders attributed to concerns that a Stratus deal would be dilutive to earnings. Ascend's puts also are fairly active as some investors form defensive positions to support their sagging stock holdings. "There's tons of activity that suggests the deals's dilutive," an Ascend options trader said. The most active and most speculative contract, the August 35 call, fell 1/4 to 15/16 on volume of 2,891 contracts, compared with open interest of 458 contracts. The decline in the contract's price shows that not everyone believes a merger will happen next week. Another institutional trader sold 1,000 September 30 calls and bought 500 August 25 calls. This is an example of a 2-for-1 bull spread which is a limited risk and limited profit trade that suggests the trader is skeptical of the rumor, but doesn't want to miss out in case it's true. Few, if any trades, are clear-cut, and Stratus isn't an exception. From a trading perspective, the deal is somewhat suspect because the rumor revived on a Friday after fading away in the previous session. Friday rumors are infamous in the options markets: Many traders have bought takeover rumors on Friday only to lose money on Monday when the deal that was supposed to be done over the weekend never happens. Some traders played Stratus' downside as they bought put contracts that would increase in value if the rumor is false and Stratus' stock price falls below 25. Both companies have declined to comment.