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To: SE who wrote (15356)	8/24/1998 1:10:00 AM
From: Dale Knipschield	Respond to of 17305

Interesting chatter on the PAIR thread...... The background: 1. The French Telecommunications company Alcatel recently purchased DSC Communications based here in the US. DSC is a heavyweight player in copper/fiber Digital Loop Carrier (DLC) systems that are placed between Telco CO's and subscribers, on customer loops over 12 KF. They save a lot of money over copper feeder cables, and give the Telco's a digital capability with which to connect to customers. 2. BEFORE Alcatel purchased DSC, the French consortium known as AXA, which I believe includes the Equitable Insurance companies here in the states, purchased large quantities of DSC stock. That this occurred is a documented fact. The implication being drawn is that perhaps that one French company slipped a little secret info to another so that they might purchase some shares before the buyout was announced to the world.....could that really be?????(gg) 3. Pairgain Inc., (PAIR) a relatively small player in the telecom arena, nevertheless has a majority share (65-70%) of the HDSL market here in the United States, and makes most of its money manufacturing HDSL systems, along with other niche-targeted small copper-based pair-gain sytems. PAIR has a steady market, relatively stable earnings, and is steady packing away cash (about 250 million presently). PAIR also has a number of ADSL products that are leading-edge candidates for deployment when the Telcos decide they can afford to deploy ADSL in the subscriber loop on a ubiquitous basis. ADSL works best on an all-copper short-length customer loops, but also can be integrated into copper or fiber DLC systems, such as those that DSC manufactures and markets. It would be a logical fit for both companies. 4. PAIR is now, and has for some time, been considered by many in the investment community, to be a prime takeover candidate. Now, here is the interesting part..... 5. Two SI members, including the respected Gary Korn, have been researching PAIR, and have independently discovered that AXA has acquired about 8 million shares of PAIR! Now, I am not proposing that anyone purchase PAIR as a result of what I have posted here. Rather, check out the PAIR thread, do your DD, and make your own decision. For instance, there is some dissent about the takeover idea because the PAIR CEO has been selling a lot of shares lately, and some are asking, reasonably, "Why sell now, if it's a prime takeover candidate?" I don't know the answer...., but I'd like to. I presently own no shares of PAIR, having been personally butchered in an early-year free-fall, when I held 3K shares purchased @ $28 and sold @ $21. Right now PAIR is only slightly above its 52 week low of 12 5/16, has a reasonable P/E of 20, and seems like a fairly "safe haven". Personally, I don't see too much downside risk, but that was also the case when I purchased it at $28 (aaaarrrrrggggggghhhhhhh!) Any feedback appreciated! Good fortune! Knip PS: If you check out the PAIR thread, start about 50 posts back from the most recent, and you'll get a good feel for what the chatter is all about.