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Technology Stocks : Ciena (CIEN)
CIEN 218.44-9.9%Dec 12 4:00 PM EST
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To: Kenneth E. Phillipps who wrote (9634)9/30/2000 8:17:53 AM
From: James Fulop  Read Replies (1) of 12623
 
>>Why has Ciena held up so well when all of the other optical players are getting hammered?<<

There are any number of reasons being cited it seems-window dressing, S&P inclusion possibilities (evidently Lehman came out recently with a list of possible inclusion candidates and Ciena was one,) it has been a next-generation networking momentum/sympathy play with Juniper, etc. But my personal opinion is that there are two reasons: 1. The recent Korean deal is seen as an important sign of things to come for Ciena in the part of the world that does not seem to be included in this present telecom "slowdown" spending scare that is affecting other networkers. (I believe Sagawa's report only included North American and European carriers in its survey.) In addition, the government affiliation of Korea Telecom may mean there are more customers to be announced there. 2. Ciena is perceived as less of a legacy business vendor which may be affected more from this upcoming perceived telecom spending slowdown and as more of a "pure optical play" which may still see increasing rates of investment spending on its products within the total context of slowing capex by its customers. (An additional related boost in this area has come with the spate of recent articles about Tellium which inevitably mention Ciena as a competitor.) Whether Ciena's business will truly be unaffected by this slowdown is hard to say, but sometimes perception is more important than reality, at least in the short run with stock prices...<g>
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