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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Glenn McDougall who wrote (7577)	11/20/1998 10:25:00 AM
From: Ian@SI	Read Replies (1) \| Respond to of 18016

Glenn, Some more "measured" comments in the Financial Post (National Post) today... Especially the last couple paragraphs. I still think this contract is a major coup for NN, but would prefer to see price go up on realistic estimates. I've seen enough volatility since July to last me for the rest of this decade. Thank you very much... ;-) Ian. ++++++++++++++++++++++++++++ Friday, November 20, 1998 Newbridge shares soar on rumour whirlwind Online speculators: Chat includes takeover by Siemens, big contract deal By JILL VARDY The Financial Post OTTAWA -- "Pure rumour and speculation" about new contracts and a possible buyer sent shares in Newbridge Networks Corp. soaring again yesterday. Investors rushed to buy shares in the telecommunications equipment maker on anticipation of good financial results (to be published Tuesday) and speculation Newbridge will win a major contract from the Global One telecommunications consortium. Meanwhile, online chat groups traded more rumours, that Newbridge may be the target of a takeover attempt by Siemens AG, the German telecommunications giant, its product development and marketing partner. "That is pure rumour and speculation and we're not commenting on rumour and speculation," said Chris Fox, a spokesman for Newbridge. Online speculators quoted a Florida newspaper as saying that the low stock price and the ratio of price to earnings makes Newbridge a cheap target. The newspaper said Siemens may buy Newbridge for $5-billion (US) or $28 (US) a share. Newbridge shares closed yesterday at $261/8 (US) in New York, up $25/8. The stock was up $3.75 to $40.35 in Toronto. The sale of 600,000 Newbridge shares last month by Terry Matthews, the company chairman, suggests the takeover rumours are overblown. It's not likely Mr. Matthews would have parted with that large a block of shares if a friendly buyout were in the works. Analysts, more cautious than Internet speculators, chalked up the stock's rise to anticipation of good second-quarter profits and the fact Newbridge shares seem to have broken through a psychological barrier. "What you've got is momentum players reading the charts, fundamentals be damned," said one analyst, whose research firm doesn't allow its analysts to be quoted. The analyst noted Newbridge has often swung wildly a few days before the release of results. The most persistent rumour is that Newbridge has won the Global One contract, estimated to be worth $750-million. The Global One partners are Sprint Corp., France Telecom SA and Deutsche Telekom AG. While Newbridge may very well have won a portion of the supply contract, it's certainly not going to be worth $750-million, analysts said. That's the entire projected capital budget of the three Global One partners for the network. It would be virtually impossible for Newbridge to pick up the entire contract, the analyst said, predicting Newbridge's share of the Global One deal might more probably be worth "a couple of hundred million over two years."