FOOL ON THE HILL An Investment Opinion
The Innovator's Dilemma
By Rob Landley (TMF Oak)

The tension between business commandos and police, as taken from author Robert X. Cringely's three waves of business development, is very much the same tension between disruptive and sustaining technologies described in Clayton Christensen's brilliant business book The Innovator's Dilemma. Cringely's theory gives fresh insight that can be used to more fully understand the lessons from Dilemma, especially for businesses that try to put them into practice.
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Wal-Mart's Super Supercenters
By LouAnn Lofton (TMF Lou2)

Discount retailer Wal-Mart announced its expansion plans today for its next fiscal year. The company is adding over 350 new stores to its line-up worldwide. Most interesting -- and promising -- from them is the accelerating expansion of its Supercenters. For Wal-Mart, food sales will likely prove to be one of the fastest growing parts of the business over the next 10 years.
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Nortel, Cable & Wireless in $1.5B Deal
By Bill Mann (TMF Otter)

Summary: An investment in Cable & Wireless more and more is taking on a proxy as to whether Internet transport will continue to grow explosively and profitably. Foolish investors should consider how much capital will need to be deployed, and whether they believe that this capital will yield a premium that comes with a continued undersupply of any product. In this case, the product is premium global Internet connectivity.
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RULE BREAKER PORTFOLIO A QuickNews Extra
Does AOL Have a Plan B?
By Nico Detourn (TMF Nico)

Rather than getting approval and merging with Time Warner, could AOL's goal be to use the mere possibility of the merger -- and thus the approval process itself -- as a way of "lobbying by other means" for its preferred business environment? After all, while individual business deals may be important, even more important is the environment in which business is done. Does that environment benefit or hurt a company? Enable or inhibit opportunity?
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Lucent Spin-off Begins Trading
By Chris Rugaber (TMF RFK)

Lucent's enterprise networking division has been spun-off, and distributed to current Lucent shareholders. The new company began regular trading today, and Lucent investors can now learn more about the new company, and decide whether to keep their shares.
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FOOL PLATE SPECIAL An Investment Opinion
Grow Your Business, Skip the Dividends
By Tom Jacobs (TMF Tom9)

Recent bad news at Eastman Kodak, Xerox, and Bausch & Lomb shows why we prefer companies that reinvest cash rather than pay dividends. If management cannot deploy cash profitably, they should go. Or you should find a better place for your money.
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Is Open Access Enough?
By Nico Detourn (TMF Nico)

The challenge faced by dial-up ISPs such as EarthLink isn't that their Internet connections use an obsolete technology, as advocates of alternate technologies would like to believe. It's that offering those connections represents the bulk of their business. This makes product differentiation more difficult and increasingly unbrandable, invisible, and irrelevant.
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BREAKFAST WITH THE FOOL
ASM Lithography Buys Silicon Valley Group
By Brian Graney (TMF Panic)

There was merger activity in the semiconductor capital equipment space this weekend as lithography equipment firm ASM Lithography Holding agreed to acquire wafer processing equipment vendor Silicon Valley Group in a stock swap valued at $1.6 billion. The purchase price works out to $41.55 per SVG share based on Friday's closing prices, representing a premium of 58%.
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Today's Market Movers

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Ups

Microcontrollers maker Microchip Technologies (Nasdaq: MCHP) jumped $4.13 to $37.19 after reaffirming the earnings guidance it set forth in August, saying it's comfortable with analysts' expectations for fiscal 2001. "We believe our stock has come under pressure due to negative announcements from other blue chip companies," said President and CEO Steve Sanghi. "Our business continues to be strong." Full September results are scheduled to be released the evening of October 12.

FleetBoston Financial (NYSE: FBF) confirmed recent rumors and agreed to acquire New Jersey-based retail and commercial bank Summit Bancorp (NYSE: SUB) in a $7 billion stock swap. The addition of Summit extends FleetBoston's banking operations farther down the Atlantic Seaboard and gives the company its first presence in the Philadelphia region. Summit rose $3.75 to $38.13, while FleetBoston moved back $0.50 to $38.50.

Heavy equipment manufacturer Caterpillar (NYSE: CAT) trucked up $3.25 to $34.25 today. The company warned late Friday that European currency weakness, continued softness in the construction and mining markets, and the impact of higher energy costs will result in Q3 EPS about 15% below analysts' estimates of $0.68. However, the company also said it is redoubling its cost-cutting efforts and expects to meet its previous forecast for "moderate" full-year EPS growth this year.

Truck and bus maker Navistar (NYSE: NAV) rose $6.56 to $36.50 following reports that it received a buyout offer from rival Paccar (Nasdaq: PCAR), which moved up $1.06 to $38.13 today. Navistar reportedly solicited a competing offer from Volvo (Nasdaq: VOLVY) in response. A Paccar executive told Reuters the reports were false.

Competitive local exchange carrier Winstar (Nasdaq: WCII) grabbed $4.63 to $20.13 following the announcement that its Office.com will provide various business features and tools to About.com's (Nasdaq: BOUT) Industry Network. The Industry Network will be run by About subsidiary ABZ, a B2B content development and outsourcing company launched today. About.com stock moved back $4.75 to $27.63.

Downs

Maintenance operations and facilities management software company Project Software & Development (Nasdaq: PSDI) slid $4.28 to $11.25 after announcing that it expects fiscal Q4 (ended Sept. 30) revenues of $44 million, up 4% from a year ago and below analysts' estimates. EPS will miss market projections as well, the company said, as Asian markets didn't come through and some large deals didn't close in time.

Biotechnology company MedImmune (Nasdaq: MEDI) saw its shares drop $20.50 to $56.75 on news that Banc of America Securities analyst Eric Ende cut his rating on MedImmune to "market perform" from "buy." Ende, according to a Bloomberg report, said the shares were overpriced given the company's pipeline and recent sales of its Synagis treatment for the prevention of serious lower respiratory tract disease.

In other analyst follies today, personalizable e-commerce software company BroadVision (Nasdaq: BVSN) shed $3.88 to $21.81 as Robinson Humphrey Co. analyst William Chappell lowered his recommendation on BroadVision to "neutral'' from "outperform,'' raising worries about a third-quarter earnings disappointment. Several other business-to-business stocks fell today in sympathy.

Upscale apartment community developer/operator Post Properties (NYSE: PPS) gave up $5.31 to $38.25 as the company said it expects third-quarter funds from operations of $0.94, missing Wall Street's $1.01 consensus estimate. The company also expects to miss Q4 estimates as short-term interest rates and slower-than-expected lease rates at new communities hurt results. Post Properties ended its dividend reinvestment and direct share purchase plans, effective immediately.

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