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

To: hitesh puri who wrote (58233)	12/21/1998 3:40:00 PM
From: Sofa Kingdom	Respond to of 61433

Consider that Cisco is positioning itself to be a player when voice and data converge onto the same media. They are cutting their teeth on voice over FR and VoIP (voice over IP). They purchased Selsius (a PC based phone switch) and will have an ethernet-phone offering early next year. They will eventually compete with LU on voice equipment. I don't think Ascend is going down the same path. In my view they are sticking to the big switch market. Buying Cascade was very strategic, and got them a presence (and big profit) in the voice arena but they don't seem to be working toward making an offering outside of high-end switches. Don't get me wrong the stock is a winner. I think the lack of diversification is what keeps getting them mentioned as a take-over target. They would be easier to integrate into another company. LU could use what Ascend has but it will need several other companies to compete head to head with Cisco in the data arena. If LU pays a premium for Ascend (ASND is hot), will they have enough money (liquidity)AND be able to integrate AND buy one or more other companies quickly enough to present a useful offering to businesses. It sounds to me like they are drawing three to get an inside straight. Odds are bad. If LU tries to stall the voice/data convergence(a Microsoft move) Cisco can keep moving into voice markets. Right now I see Cisco with better long term potential. Ascends short term looks great. Lets see where they go. They could be good too in the longer race.

To: hitesh puri who wrote (58233)	12/23/1998 3:08:00 PM
From: Rob Pierce	Read Replies (2) \| Respond to of 61433

I've noticed that despite all the speculation about buyouts either by LU, IBM, or others that ASND's price seems to track LU's at roughly .6 to 1. I've been watching that "rule" for at least a couple of months now, off and on, and have been amazed at how consistent this seems to be. There may be other suitors or rumored suitors or no suitor at all, but it seems that a lot of investors (speculators/arbitrageurs?) are betting that LU will acquire ASND at better than .6 per LU per ASND share. Unfortunately I think LU's share price is the driver here, which means that if either LU or ASND makes a move/acquisition that would nix a LU/ASND combination, ASND's share price could take a nasty slide when the speculators bail (and don't discount that too fast - we've already been to hell, er, I mean 22, and back this year already). I'd love to see ASND pull a 50 PE on it's own, but I suspect that the current ASND valuation is a reflection of a LU deal, not ASND's strength. And if Mory and crew know that a LU deal is either not imminent or not likely, it would certainly explain their eagerness to profit from while the price is up. I love the current share price (my average is in the high 30's), but I dread it's apparent tie to LU's price without some kind of deal in place. I just can't get the CIEN/TLAB debacle out of my mind when thinking about what LU might be capable of doing to the competition's investors. I'd certainly like to see a chart plotting (LU * 0.6) and (ASND) that would either confirm or refute this observation if anyone has the means to conjure one up quickly. Rob Pierce