Corvis Corporation (CORV) Message Board

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Technology Stocks : Corvis Corporation (CORV)

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To: Bob Kim who wrote (371)	3/7/2001 11:05:08 AM
From: Doug Skrypek	Read Replies (2) of 2772

FROM MERRILL LYNCH: Corvis Corp. (CORV; $8.13; D-3-2-9) Optic to the Core (Bulletin Available) 02E d$0.24; 03E $0.30; Market Cap.: $2,665mn We are initiating coverage of Corvis with an intermediate term Neutral and long-term Accumulate rating. Corvis may be a story stock, but the critical issue is determining just how real the story is. Corvis’ all optical product line touts its ability to yield customers more than 70% savings. We acknowledge that the premise of providing superior technology with a compelling business case is attractive, but we are still unconvinced but remain open minded. Corvis also sells to a very limited customer base - the company has three announced customers. We expect to see one new customer by the second half of this year, but the timing and volume of purchases is challenging to predict. Corvis is currently unprofitable; we estimate a loss per share of ($0.24) in 2001. Despite this, the stock currently trades at over 13 times our CY01 sales estimate of $320 million, representing a premium valuation to other optical systems companies such as Nortel, Ciena, and Sycamore. We expect the company to earn $0.03 per share in 2002. (M. Ching/S. Leopold)

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