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Technology Stocks : PairGain Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Tim Luke who wrote (29303)	3/12/1999 4:24:00 PM
From: Esway	Read Replies (1) \| Respond to of 36349

notice that 7k trade was above the ask of 7/8 at the time also?

To: Tim Luke who wrote (29303)	3/12/1999 9:33:00 PM
From: Rainmaker	Read Replies (3) \| Respond to of 36349

Tim, some thoughts on PAIR that I want to bounce off you since you seem to have the "inside track". I too see PAIR being a takeover candidate in the upcoming months. The timeframe is the question. As you know, in the M&A game, mergers happen FAST. Usually in less than 5 days to minimize leaks. The largest and last hurdle is usually with the legal group (up to 40% of the time). Your estimate of 8 weeks is interesting. Here is my thinking on that timeframe. Pascoe has one month until 1Q99 ends to land a decent Avidia contract. If that doesn't happen, the price of the stock again suffers because earnings growth is just not happening (or they cannot announce "deals in the bag"). Earnings will be announced around your 8 week time table and The Board is looking ahead to position themselves for stock price erosion, if any. An announcement that they are seeking alliance alternatives will deflat ANY bad earnings report. Pascoe was brought in to transform the company. The Board knows that the company can EASILY command mid 20s in a merger and they are willing to let it go at that price if forced to do so. But with some Avidia sales, they can command mid 30s, their objective. What I see is Pascoe being a lame duck CEO. He was brought in as a highend marketer (under the guise as CEO) to land Avidia sales. Once contracts are in and the price moves up, the FOR SALE sign goes up. As the CEO, he will retain a significant position with the acquirer and Chuck will slip away into happy retirement with his 500k shares. As the industry consolidates, PAIR has no choice but to align themselves with a larger partner or die a painful death. My lame duck supposition is based on the company moves: Chuck dominated the December earnings warning CC and 4Q98 CC. Why would he do this if Pascoe was indeed solicited and served as a captive consultant beginning in February 98? In 10 months, Pascoe should know all that Chuck does RE operations. FWIW, Lucent made a run in November 98 (second attempt; first attempt in June 97). They offered 22. Chuck and The Board considered, but ultimately declined. They know that Avidia is great stuff and with some sales, the stock is easily worth mid 30s. That is why they've been resting their hats on 32 - 35. After merger talks died, they knew they were "in play" and a hostile takeout could follow, especially with AXA owning 22% of the float. PAIR then adopted the poison pill. AXA began dumping shares, stopping in January 99 and now owns less than 4%. Apologize for the rambling. Your thoughts appreciated. (ps. Can you trigger your PM function?)