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Technology Stocks : New Focus, Inc. (NUFO)
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To: pass pass who wrote (350)3/16/2001 1:01:22 PM
From: Benjamin Booter  Read Replies (1) of 475
 
Of course your scenario could be correct, but I think not for the following reasons.

If you recall, in late January NT (one of the biggest buyers of optical components) was telling everyone to expect 30% growth this year. All of the optical component companies provide guidance based on what their customers tell them their orders will be. JDSU, NUFO, AVNX, GLW all gave guidance for the orders they had at THAT TIME. In mid to late February a lot of orders were cancelled and/or pushed out. The componenet mfgs. are the tail at the end of the dog. They are the last to know when there is a hiccup in end user demand. I honestly believe that when NUFO raised guidance the end of January, they were guiding to what they had at that time with some cushion included. I don't think investors realize the magnitude of the drop-off in capital spending that has happened in the last 4 weeks. It's big and will probably get bigger. ALL component companies have guided down this last month, some multiple times. I don't know if they will all have to guide down again, but it is a real possibility.

Now if management was trying to pull a fast one on investors by raising guidance so they could sell their stock, they didn't do a very good job. Why would you sell only 1/4 of 1% of your holdings and take a paper loss of over $100 million dollars if that was your plan? Most managements sell a little every quarter because they have a small window of time after every earnings release.

If the lawyers are going to go after NUFO, that will have to go after every company in this space for the same scenario.
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