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Technology Stocks : JDS Uniphase (JDSU)
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To: mts362 who wrote (7957)3/22/2000 7:07:00 PM
From: Tecinvestor  Read Replies (2) of 24042
 
Re: Hopefully it turns out to be nothing, and this was nothing but a big buying opportunity.

As of yesterday I would have been inclined to agree that the potential problems with the JDSU - ETEK deal could have been smoke created to widen the spread between ETEK and JDSU. At that point there was no public knowledge that any of JDSU's or ETEK's customers had anything negative to say about the merger.

However, Alcatel's complaint to U.S. authorities presents a new and significant development. Alcatel is ETEK's largest customer and they are asking for time to find a different supplier before the merger is consummated.

I am fairly confident that both JDSU and ETEK can and will do a number of things to assure Alcatel, and the authorities, that Alcatel will not be exploited as a result of a prospective merger. ETEK is not about to lose its largest customer. In all likelihood, Alcatel is posturing, i.e., wisely seeking to protect itself from price increases by playing the "merger complaint" card.

I still believe this merger will close but I think there will be some delay and more anxiety before this occurs. I do believe this delay and anxiety will impact the stock of both JDSU and ETEK. Clearly, ETEK already has been affected. However, it is not at all clear to me the degree to which the near term price of these stocks will continue to erode, if at all.

I think it appropriate at this juncture that JDSU and ETEK issue a joint statement indicating that they are addressing and will alleviate Alcatel's concerns.

Tecinvestor
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