Technology StocksUSRX

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To: jonathan smith who wrote (676)7/25/1996 9:46:00 AM
From: dppl
   of 18024
To all USRX supoporters:

Would someone take a look at the USRX chart and tell me why anyone would want to enter here?

If DLJ is issuing a "buy" I hope they tell people to wait until the 40s, because the chart is going that way very clearly.

I would be very cautious about entering here unless you write Aug 40 or 45 covered calls as well.

good luck,


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To: dppl who wrote (677)7/25/1996 10:16:00 AM
From: Deepak R. Ghosh
   of 18024

After reading through over 70 postings since yesterday, I saw lot
of misinformation. Let's set the facts straight:

1. EPS was $0.66/share. No charge was taken. The press release
said that a charge will be taken in the next quarter. The press
release clearly said that the amount of the charge was unknown at
this time. So let us not speculate whether it will be $0.01 or $0.66.

2. There was no real factual info on revenue and EPS slowdown. The
press release said that do not expect revenues to keep marching on
infinitely. Well the rev growth rate has been 20% sequential. that
is phenomenal. If you were the CEO of USRX would you go ahead and
keep saying that rev growth rate will become outrageous, you will
be inviting tons of lawsuits if you failed to do so. How many
companies that you know are even capable of showing even 10% quarter to
quarter growth and still have a PE of 37 and show over 100% yearly
EPS growth.

I suggest everyone in this forum read the press release very carefully
including the consolidated statement of income before they start
speculating on the numbers before knowing what they are.

Deepak Ghosh

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To: Amir Shalit who wrote (652)7/25/1996 10:24:00 AM
From: Warren Gates
   of 18024

If USRX is only a modem company, I won't buy at this levels ...
but then, if USRX is only a modem company, its gross margins will only be at the 20% level and its PE should be at 10 to 15 ...

But USRX is like buying Ascend/Shiva and getting the modem business at a huge discount considering that they're the market leader in that industry.

I think we've hit the floor ... stock should be $65 within a week

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To: Warren Gates who wrote (679)7/25/1996 11:48:00 AM
From: Mr. Pink
   of 18024
More bad news awaits USRX.

I understand from my operatives in the field that USRX will lose its contract with Livingston Software, which provides critical software for its total control hub. TCH provides 40% plus of USRX's operating income and this could be a blow to the company. I am not a tech expert but would be interested if anyone could quantify the potential impact. But I think its not good.

Mr. Pink

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To: Warren Gates who wrote (679)7/25/1996 12:31:00 PM
From: Tulvio Durand
   of 18024
I agree that USRX is a good buy at this level. But I'm not sure its price will rebound so quickly.

CNBC stated that 20th Century Mut Fund sold 500K shares of USRX last night at 51. Worse, they still own some 8 million USRX shares. So USRX will be under pressure for some time, I believe.

USRX's CFO said on CNBC this morning that future Qs earnings will be in the neighborhood of 15%, down from the customarily expected 20%. He explained that, as revenues have grown so huge and continue to grow, it is unreasonable to expect the same % growth. Well, that goes without saying -- companies such as IBM, MSFT have seen the same thing happen with their growth. What he did not say, and which he should have added, is that with a larger USRX company comes less volatility, more stability, and the emergenge of a true blue chip company. Analysts are predicting the stock will be in the $90 to $115 range in a year. I can live with a 100% gain from here in one year. Besides, I still have a substantial cap-gain situation. So, I'm a long term holder. I'm posting this on SI and see if others agree with my position.


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To: Deepak R. Ghosh who wrote (678)7/25/1996 12:35:00 PM
From: 4finger
   of 18024
Thanks for some sane comentary. Reading various peoples trading strategies etc is becoming tiresome. May I humbly suggest we try to get at company fundamentals. I noticed Mr. Pink has raised an issue that seems worthy of some investigation.

Also, I was wondering if you or anyone had an understanding of Scorpio & how they fit strategicaly with USRX.
Is Scorpio likely to be additive to earnings. I am secretly hoping that this an ADSL technology acquisition.

Any thoughts?

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To: 4finger who wrote (682)7/25/1996 12:40:00 PM
From: David Lawrence
   of 18024
Deepak, here's part of the release regarding the Scorpio acquisition:

BusinessWire Press Release:

SKOKIE, Ill.--(BUSINESS WIRE)--July 2, 1996--U.S. Robotics (NASDAQ: USRX) announced today that it has entered into an agreement to acquire Scorpio Communications Ltd. (Scorpio) in a stock transaction subject to approval by Scorpio's stockholders and other conditions. Terms of the agreement were not disclosed. U.S. Robotics expects the transaction to close within three months.
Based in Tel-Aviv, Israel, Scorpio designs, manufactures and sells scaleable, fully-redundant, fault-tolerant ATM switches that target workgroup LAN, corporate backbone and WAN access environments.

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To: Jeff Raihanan who wrote (671)7/25/1996 12:41:00 PM
From: John Tooker
   of 18024
If we had the ability to *absolutely* require our
subscribers to buy only USRX modems..... we would, instead
of the 80% market share Robotics now gets.

We provide tech help 7x24... and Jeff Raihanan views are
*absolutely* correct!

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To: dppl who wrote (665)7/25/1996 12:43:00 PM
From: Mephisto
   of 18024

Since people rely on many different models to explain the chaos in our lives, including the stock market, I was intrigued that you chose graphics or pictorial representations in the forms of charts to make sense of what goes on in the stock market.

Although this sounds like a silly question, does the head and shoulders formation really look like a head and shoulders?

You asked me to check out what you said about the chart on USRX, where would I look?

Thanks for taking the time to reply?

PS: I think message 654 should have been addressed to you.

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To: 4finger who wrote (682)7/25/1996 12:43:00 PM
From: David Lawrence
   of 18024
And here is the info pertaining to the anticipated charge:

Reuters News Story:

SKOKIE, Ill., July 24 (Reuter) - U.S. Robotics Corp said Wednesday its proposed acquisition of Scorpio Communications Ltd, a Tel Aviv-based technology company, will result in a significant one-time charge against earnings.
The amount of the charge, primarily related to purchased research and development costs, has not yet been determined, the company said in a statement.
Subsequent to the June 30 end of the company's fiscal third quarter, U.S. Robotics agreed to acquire Scorpio. The transaction, which is expected to close in the current quarter, provides for the issuance of U.S. Robotics common shares valued at about $80 million.
The transaction will be accounted for as a purchase. Excluding the impact of the one-time charge, U.S. Robotics said it does not expect the transaction to have a significant impact on results for the fourth quarter.

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