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Technology Stocks : Ciena (CIEN)

CIEN 200.29

+2.1%

Nov 26 4:00 PM EST

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To: jack bittner who wrote (8002)	2/15/2000 5:14:00 AM
From: James Fulop	Read Replies (2) of 12623

>>what have they executed so well<< Around the time of the Tellabs debacle, Ciena had far fewer customers than now-in fact only a couple (just Sprint and MCI at one point) and that fact was given for its risky nature as an investment. Now Ciena has diversified with at least 28 customers and more unannounced ones... ciena.com >>that makes the market value them on higher multiples than NT. << I think the market is valuing them in this way due to two reasons: 1.) Ciena is considered a "pure optical play" without business in slower "legacy" equipment (which has a lower purported growth rate.) 2.) Wall Steet seems to react in excess (I can hear a big "duh" in the background...<g>) which can be seen by the extreme negative reaction given to Ciena after the failed Tellabs deal (and subsequent plunge to single digits.) Now we are possibly seeing the reverse of that excess... >>what has cien done big besides this latest Ireland-BT deal<< In addition to that deal and the general diversification of its customer base, it should also be noted that Ciena has put more effort into courting the newer telecom start-ups (upstarts?) more than the established (or legacy?) customers with the idea that those customers will grow faster than the older type...(or at least that was the reason given in the last CC.) Finally, among those customers, a great deal have been in Europe, where traditional relationships are not as important between customers and North American vendors (i.e. no ATT old boy network to deal with...) >>how does that compare with nt's almost 30 OC-192 installations and $22billion in revenues and 53% jump in net income (there's an odd phrase "net income")?<< In the last conference call, I remember a Ciena executive saying they were seeing very little of Lucent, and NT all over the place-I don't think anyone thinks NT is not a fierce competitor... Perhaps when comparing the two, instead of instinctively thinking Ciena is overvalued, couldn't it be that NT is undervalued? <g> PS I am not sure I answered any of your questions, but at least I gave it a try...<g> Regards

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