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

To: Edward J. Edwards, III who wrote (1532)	8/11/1998 11:09:00 AM
From: djane	Read Replies (1) \| Respond to of 1629

Bonus Feature. Discussions of ASND, LU and the networkers at the 8/7-8/9/98 Money Show investment conference in SF. Your faithful correspondent lived and breathed stocks, stocks and more stocks for 3 glorious days. He neglected his work and wife on a mini-vacation sitting inside crowded conference rooms with stale air and uncomfortable chairs while being subjected to the most banal cliches over and over again ("Please buy my pathetic newsletter which tells you to buy and sell seemingly at random...") Nevertheless, he persevered to ask some of the premium fund managers and newsletter writers for their opinions. Please feel free to private message me for their opinions on your favorite stocks which I neglect to mention. In summary, almost every manager stated that LU will probably buy ASND after 10/1/98 and it was a good strategic fit. 1. Kevin Landis (FirstHand Funds). Kevin was very, very impressive in a 1-hour presentation and then 1-hour follow-up to a small group. He really knows his stuff. Major themes include photonics and broadband access to the home. Very positive on cable modems, WebTV via cable and need to upgrade the cable network infrastructure. In response to my question, Landis said LU will probably buy ASND after 10/1/98 due to LU's rich stock currency and "footrace" with CSCO. But, he said LU may wait to see if Livingston and Yurie sales do well. He heard rumors that LU had bid on BAY, which added to his belief that LU would buy ASND. Mentioned regretfully that he had sold too soon and missed the recent run up [Note: Sold in the low 30s after holding on the way down from the 60s]. Said ASND acquisition of SRA was, ironically, funded by recent market cap rise due to LU takeover rumors. Landis would be surprised if LU bought COMS, which was a big company, tough to swallow, and had a mass market focus with low profit margins. Landis doesn't hold the main networkers and prefers networking chip companies (his specialty). PMCS [ASND supplier] is his top holding in his 3 funds and he added more on recent weakness. Likes TXCC, VTSS, AMCC, LEVL, BRCM, MMCN and GALTF. Thought TLAB/CIEN merger was very good for TLAB for optical backbone capabilities. Very positive on UNPH. 2. Emeric McDonald (Amerindo). Again, very, very impressive perspective. His focus is emerging, hypergrowth tech stocks (the search for the next MSFT, CSCO and DELL). He made a very persuasive argument on why YHOO and AMZN are not overvalued and will dominate our lives through the mass customization model. [Note: I missed the Internet content stock runup and haven't bought one... yet.] He thinks there are huge opportunities in optical networking. In a private conversation after his presentation, he said LU will probably by ASND after 10/1/98. Negative on COMS -- "lost to Cisco" and it will difficult to recover. 3. Kevin Gooley (S&P). Very positive on CSCO due to 30-50% industry growth, data/voice convergence and need to upgrade networks worldwide due to deregulation and end to telecom monopolies. In a private conversation after his presentation, Kevin said ASND would do well as a standalone company although LU/ASND may be a good strategic fit. He did say he thought CSCO was "eating Ascend's lunch" without providing any explanation. Thought LU had a high valuation but had great prospects. Negative on COMS due to USRX integration problems, NICs, less broad product line and late to switching market. 4. Peter Trapp (Needham Growth Fund). Major themes include cable companies and foreign telecoms. In a private conversation, he said he owned ASND and thought LU would buy it after 10/1/98. He started pumping me for info after he realized that I knew much more than him about ASND. I confidently said ASND was a "Strong Buy" and had recently been upgraded to my Global Super Priority Buy List <gg>. 5. Garrett VanWagoner (VanWagoner funds). In a private conversation after a luncheon on High Tech Stock Picks, Garrett said he thought LU would buy ASND in the next year after 10/1/98. When I said, "Well, that's a little wishy-washy. What's your best guess?" He then really looked at me, laughed and said, "Well, I was just covering my ass. I'm sure LU will snap them up right after 10/1/98. It's a beautiful fit." For some perspective, I attended the same luncheon last year in mid-8/98 during which Garrett stated to the general audience that he had sold ASND in the low 50s in early 7/97, had good contacts in the company, knew about the 56k software glitch and slow European orders, and said ASND's price would come down hard. At the luncheon this year, I congratulated him on his excellent call last year. He said he had rebought ASND (didn't say the price) and would probably buy more in the next couple months if his ASND contacts remain positive on its prospects. Garrett did say he hated the SRA acquisition [probably because he hadn't anticipated the drop], but we didn't have a chance to discuss this idea. 6. Michael Murphy (well-known high-tech gadfly). [Note: I take everything Michael says with a massive grain of salt. Many of his comments and stock picks are, frankly, bizarre. To be fair, he does seem to have good contacts in Silicon Valley companies.] In a private conversation after the tech luncheon, Murphy said LU will buy ASND, COMS and CS after 10/1/98.**{!!] He said ASND was doing well again and was competing well against CSCO. He said there was a "great fit" between LU and ASND. Interesting, he thought ASND and COMS should get together and they don't have as much overlap as you would think, e.g., COMS low-end RA and very good routers which they have failed to market. For some perspective, at the early 10/97 conference in Seattle, Murphy said he would consider buying ASND (then $32) solely because it was "so cheap." At the recent conference, I asked and Michael said he hadn't ever bought or recommended ASND in the meantime and "had missed it." On another note, I do like David Jones (Murphy's Director of Research). In a private conversation, he said LU/ASND would be a good fit but that LU may decide to go the startup route and may not need ASND. 7. Louis Navellier (MPT Review and mutual fund manager). First, the perspective. Navellier is a momentum guy who works almost solely with computer valuation models. At the early 10/97 conference, I asked him about ASND. He said, "It's a dog with fleas. Don't go there. They massively overpaid by paying $3B for Cascade." So, I looked forward to my next encounter with Mr. Navellier [Note: I fully disclose my bias against this guy. He kinda makes my skin crawl. I hate how he looks, his voice is annoying and I just hate people who buy and sell stocks solely on technical analysis and momentum without doing any fundamental analysis. At the prior conference, he said he didn't really want to know anything about the companies products, prospects and analyst reports.] At the 8/98 SF conference, I once again bravely asked Navellier about ASND in a room of 600-700 people (why do they listen to this guy?). He smirked and said, "It's a dog with fleas. They paid way too much for Cascade and they lost their credibility with Wall St." [Unbelievable that he hasn't updated his crowd pleasing sound bite for over 1 year and missed the ASND stock rise from $25 to $50.] He did say that he thought it would be a good marriage with LU [I think with the implication that ASND needed a buyout because it was in such bad shape.] Djane comments. To the extent that they knew much about ASND, the fund managers/newsletter writers were very positive about its products, WAN competitive position vis-a-vis CSCO, and possible LU buyout. They pretty much all "know" something about CSCO and recommend it. I find it fascinating how CSCO has become the safe high-tech pick. It gives me hope that, if they realize how well ASND has been doing vis-a-vis CSCO, ASND's stock price hasn't even begun to appreciate (okay, I resisted the "ascend" cliche) and I should resist the temptation to take profits. As always, comments on any of the above items are much appreciated.