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

To: Tim Luke who wrote (54320)	9/17/1998 4:10:00 PM
From: gbh	Read Replies (2) \| Respond to of 61433

Tim, care to explain why you are so opposed to shorting? Especially as a day trader, you shouldn't be such a prude :) Gary

To: Tim Luke who wrote (54320)	9/17/1998 4:33:00 PM
From: djane	Read Replies (5) \| Respond to of 61433

Tim, first, full disclosure. I went short at $49 today. The silly options rumor crystallized my thoughts. Yes, I am more cautious these days on ASND. My main fear. ASND will have a blowout quarter (pump out the long-term contracts, bring out that deferred revenue, and maximize their price for a possible LU takeover) and then express caution in the CC on future quarters given a possible slowdown and increased competition in the telecom equipment market. Given its PE multiple, ASND's share price (if no LU takeover) could halve under that scenario. In this market, all high PE stocks have (or will) get killed. Although I still strongly believe in the strategic fit between LU and ASND, LU may decide ASND is too expensive, there is too much product overlap, LU will take the risk of falling behind by developing next-generation products in their vaunted R&D labs, and will buy start-ups ala CSCO model to fill holes. As Chambers has stated repeatedly, big cross-country mergers are difficult to pull off. Another fear. I'm starting to believe that Mory and ASND believe it can go it alone. Yes, it can, but not as a high PE multiple stock or killer investment. Ferocious competition is moving into the data networking world as data networkers move into the telecom equip world. I'm just trying to listen to what the market is telling me. Recent declines in the price of LU and CSCO, ALA earnings warning and statement that France Telecom is cutting back on orders, NT job cuts, CIEN and TLAB warnings, chip makers (PMCS/VTSS/etc.) price delcines, etc. Telecom equipment suppliers were relying on international growth for their PE multiples, but the global economy is in recession (depression in Asia). And, I just hate holding over the weekends these days given all of the market/Clinton/international uncertainty. It's all enough to drive a 37 year-old equities bull to learn about bonds. :-) As always, substantive critiques are welcome. Just trying to be a nimble trader. djane P.S. Isn't it ironic that the CNBC report tonight on ASND could be the top? After all of our work...