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Technology Stocks : LUMM - Lumenon Innovative Lightwave Technology Inc.
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To: Don Johnstone who wrote (1733)5/6/2000 4:29:00 AM
From: greeze  Read Replies (4) of 2484
 
Don, We are in a unique new world where the public are now venture capital investors in development stage, pre revenue public companies. All Lumenon has produced are press releases about what great things will happen if the technology works. Lumenon has never shown a single working part to anyone publicly. Look what happened to them at OFC, many carefully worded statements about target specifications but no actual data on any optical chips. You are reporting inside information on Lumenon that none of the rest of us have and frankly I do not believe since Lumenon and Molex would announce publicly if Lumenon could make working parts. Because Lumenon is public they have to be very careful in what they say. If they are sampling working DWDM's to customers they would announce it, and Molex would announce it. I think it is fine to invest in Lumenon as long as you realize the technology has yet to be proven to work. You also have to look at the history of Sol Gel processing to evaluate the risks. Sol Gel as a technology base for optical integrated circuits has been worked on for many years by many companies and also the university community. Sol Gel has always produced fast and easy to make optical chips but the optical performance was never there. Look at an example from Lumenon's own newsletter which is just out:

Views From The Optical Edge

Presented by Lumenon

We build tailored "off-the-shelf" products
Detailed testing of 8 channel Sol-Gel on silicon DWDM by the PHASIC process has recently started
Insertion loss is decreasing steadily from values of around 10 dB towards our target of 5dB

Look at the statements Lumenon makes. Insertion loss is decreasing steadily from values of 10 dB to our target of 5dB. Do you know how bad 10 dB loss is for an 8 channel DWDM? It is end of story, game over. If Lumenon cannot get the insertion loss down they will not be able to sell product. This is especially troubling since insertion loss is one of the things Sol Gel has always failed at. The same statement "Insertion loss is decreasing steadily from values of around 10 dB towards our target of 5dB" was also in Lumenon's brochure at OFC. What progress have they made since then? A 40 channel Gaussian AWG DWDM now is sold with specifications on insertion loss of less than 7dB. There are now at least five companies that can make this type of chip.
This all points to the problem with evaluating development stage, pre revenue public companies. The public has no way of judging if the technology can work or not. When is Lumenon going to ship one working sample and receive the first dollar of revenue? And by the way I think the management should be lynched for taking your money and becoming multi millionaires without having a single dollar of revenue.

Greeze
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