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ASCEND SEES STOCK PRICE CLIMB OVER TAKEOVER RUMORS

Shares in Ascend Communications Inc finally turned around and started up at the end of last week amid rumors that it could be set to be acquired. The rumors managed to halt a slide in the companies share price that had seen it fall from a year high of $80 down as low as $22 amid poor results and industry reports that it is struggling to sell its networking switches. The whispers have it that the low stock price is has led rival companies Lucent Technologies Inc and Northern Telecom Ltd to start looking to acquire the company. Neither Lucent or Nortel would comment on the reports but Ascend shares, which opened at $23.75 on Thursday hit a high of $32.25 before settling back at $28.93 at the close of the market on Friday. Poor results and industry reports that it is struggling to sell its switches have brought Ascend’s shares down from their year high of $80. The takeover rumors renewed speculation that circulated in October. At that time, Ascend rallied to about $35 a share as market rumors tied Ascend to Lucent. According to Michael Ashby, chief financial officer at Ascend, the company’s policy is not to comment on buyout speculation, but he dismissed the talk as an old rumor. Instead, the company was keen to put the rising stock price down to its statements that it is in line to make Wall Street analyst earnings forecasts for its fourth quarter for $0.24 a share. During the week both 3Com Corp and Cabletron Systems Inc said they would not meet Wall Street expectations for their most recent quarters.

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CBR Staff Writer

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