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: H. Wai who wrote (56173)	10/20/1998 11:05:00 AM
From: bucky89	Respond to of 61433

I believe Ascend is a strongly growing company. But, if they are a strong company, why it has to finance the unknown company to get the deal? They took a reserve against it this quarter, does it mean that it will be bad debt? I don't understand why they have to do it. Mory made it very clear during the conference call that they were funding several CLECs because their competitors were offering to do so. If they did not do the funding, then they would have lost the deal. ASND with $800M in cash and equivalents on their balance sheet can well afford to do so, so why not? Mory also said these are definitely NOT bad debts. Rather, this is part of an industry trend. Like GM when they offer $2.9% financing so that you can buy their cars, this is not bad debt. They do it because Ford is doing it too. But unlike GM, Ascend decided to take a reserve against the full amount of the loan. This has nothing to do with the debt being good or bad, but rather their CFO Ashby is using it as a tool to bag their earnings for future quarters. Trust me, I know what I am talking about. I used to work in finance in a previous life. bucky89