CIEN's volatility and movement remind me so much of my pleasant encounter with VVUS earlier this year.
Similarities:
(1) the chart, no need to say more
(2) one-product company
(3) no sales and no earnings last fiscal year, only beginning to ship commercially this FY, good earnings the first (or two) quarter(s)
(4)ridicously high market cap, greater than $10 Million/employee, not even MSFT, DELL, or INTC came close anytime in their respective history
(5) quick secondary offering after IPO, VVUS had a tertiary offering, if my memeory serves me
(6) spent little on R&D relative to sales and market cap
(7) competition is fierce, competitors's products are around the corner
Differences:
(1) VVUS has many customers, CIEN has two paying customers
(2) VVUS's stock crashed from 80 to 30s in two months with much less insider selling than will be the case with CIEN. CIEN has not crashed, but will (in my opinion)
(3) I profited handsomely with VVUS, presently I'm in the red with CIEN
(4) Barrons did a negative article and a follow up on the hard-to-believe VVUS market cap. I don't think today's Barron article on CIEN is considered negative, although it raised the flag about high valuation. Stay tuned, more to come.
(4) AT&T did not accept MUSE to test on their employees |
