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

To: Doug who wrote (5799)	3/23/1999 4:35:00 PM
From: BMcV	Read Replies (3) \| Respond to of 8358

Hi Doug, my guess on the new divisional structure is: 1. Network Management Software -- The Spectrum product, which is supposedly very good. A year ago there was talk this "hidden asset" had a market value of $1 billion if it were spun off as a separate operational unit. I think since then they have lost ground, especially to Ascend. 2. Enterprise Network Connectivity -- This would be all hardware, their traditional hub/switch business. 3. Service Provider Infrastructure -- Carrier hardware products, I think this is fantasy right now. I'd hate to place any bets on them becoming serious competition in this area, against Ascend, Lucent, Cisco, Newbridge, etc. 4. Services -- Also fantasy. I get Unisys shivers hearing the word "services". We heard that mantra from them for years before it finally took hold. And Unisys had lots of advantages CS doesn't, mainly lots of experience and lots of customers. CS is still pretty small, has a good but limited customer base (government and universities), and a bad reputation. Who is going to ask them for help setting up and running their network? Maybe the Compaq connection could help here, but I doubt it. Maybe I just lack imagination, but I don't see them making a big splash in this area. The best you can say about the re-organization is that it makes a Spectrum spinoff more likely; the worst is that it means Craig Benson still thinks he can fool the street with gimmicks. If CS is going to grow it's going to be an the basis of good results in divisions 1 + 2, Spectrum and enterprise hardware. But it's going to be tough, since both areas are maturing and populated with good competitors. All this, of course, is from an industry outsider, though I have followed the group as an investor a couple of years. So grab that salt shaker... good luck. PS: if you've been reading Yahoo today, supposedly there have been a couple of upgrades, one from Paul Johnson. See message # 17368. PPS: Here's the message: "Another buy recommended by: james_hz 17368 of 17378 * CS -- CS: REPORTS FOURTH QUARTER ABOVE EXPECTATIONS; RAISING ESTIMATES TO REFLECT BOTH THE TOP-LINE STRENGTH IN THE QUARTER AND EXPECTED COST SAVINGS; CONTINUE TO BE IMPRESSED WITH MANAGEMENT FOCUS AND NEW PRODUCT FLOW; REITERATE BUY RATING Analyst(s): JOHNSON, PAUL Rating: BUY Report link: trading.etrade.com;