Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: gbh who wrote (51985)	8/13/1998 9:26:00 AM
From: djane	Read Replies (3) \| Respond to of 61433

Hi, gbh. I'm out. Just being cautious. I don't really anticipate a severe market reaction ala SRA news via the SJ Mercury. The article I posted last night seems to be from a fairly obscure journal. I'm just starting to question whether ASND intends to use any price rise due to LU takeover rumors in the next couple months to make it own acquisitions. And, is this another indication that ASND intends to make itself unattractive to LU in order to remain an independent company? If so, the LU takeover premium built into ASND's price will disappear quite quickly. The reference to ASND wanting to become one of the top 4 "telecom" companies is fascinating. I realize that the SRA acquisition (possibly a very good one) was a strong step in that direction. But, as a small investor with a large portion of my portfolio in ASND, I just don't want to stick around for this transition without having an uncertainty/risk discount built into my share price basis. The fact that ASND hadn't made an acquisition since Cascade had been strong evidence to me that it was positioning itself for a sale. The SRA and now possible other acquisitions by ASND in the next few months would tend to support an opposite argument. Other reasons for my sale: -Unknown size of companies being considered by ASND for acquisition. Obviously, a smaller company would be of less concern. But, heck, the SRA deal was under $500M (counting their cash) and Wall St. freaked out. -SRA acquisition, spin-off sale uncertainty and integration distraction cited by various analysts. I normally try to avoid investing in high-tech companies for at least 6 months after a merger. I rebought at about $44 because the $7.5/share drop and loss of $1.5B market cap were overdone in response to the small SRA acquisition. -Apparent large put buying on Wed (acquisitions usually announced on weekends?) -Clinton testimony on Monday (8/17) -General market nervousness in August, especially on Fridays -Russian/Asian market/currency problems -Options expiration next Friday I still strongly believe LU/ASND would form a very strong strategic fit. If it doesn't occur, ASND will do fine short-term, but it's a difficult path long-term with CSCO, NT/BAY, LU/?? and large European companies gunning for your lucrative space.