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Technology Stocks : JDS Uniphase (JDSU)
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To: SJS who wrote (884)8/27/1999 12:10:00 PM
From: Bulldozer  Read Replies (1) of 24042
 
I am not aware of anyone else with Cerent's capabilities in the low end. My understanding is that Kleiner Perkins actually created the company to fill a niche that nobody was filling (and in the process turned $8 million into $2 billion in a year or two). Cerent combines the functionality of lower end ADMs and DCCs from the likes of Nortel, Alcatel, LU and Fujitsu. Tellabs, which plays more in the high-end, will not be initially affected by Cerent and was unjustly sold off yesterday.

Cerent comes with over 100 customers and a projected rev rate of $300 million in CY2000. On a P/S ratio, the price was 23X. This compares to 70X for Juniper at current prices. I believe Chambers initially balked at the price, but was convinced after looking at the potential revenue a year or two out. So, it may not have so wildly overpriced afterall (relatively speaking).

Bulldozer
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