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 : Cabletron Systems (CS: NYSE) -- Ignore unavailable to you. Want to Upgrade?

To: Pruguy who wrote (5686)	3/9/1999 11:53:00 PM
From: Peter Yang	Read Replies (2) \| Respond to of 8358

I remember in the recent CC, CS indicated that in the current quarter the increase in sales of switching products outpaced the decrease in sales of shared hubs for the first time. If that's true, we should see a revenue growth quarter over quarter. In addition, the higher margin in the switching products might also give a boost to the earnings. I would like a buyout for CS, but not when CS is around $8 (even for a 100% premium, i.e., $16 is still low). CB should somehow inflate the revenue and earnings for two consecutive quarters (by selling more products, stuffing the channels, or even cooking the book) to drive the price to around 20 and then fetch a 30-50% premium for a buyout. I really don't see much downside risk at this level (dead money for a while at most). CS has been pretty on time on preannouncement. So far we haven't heard anything yet. My guess is that they will meet the estimates this quarter. I also think they will announce the deal with Compaq during the earning conference call. Actually, I'm considering average down before the earning report.