Rustam,
The significance of this contract is akin to a major technical breakthrough on cold fusion.
The relationship between the two companies can best be described as icy due to the T/LU dirty tricks back in 98. Saying there was bad blood between the parties would be an understatement. The parties have now kissed and made up.
In 98 Ciena needed AT&T. Today, AT&T needs Ciena. Interesting how things change.
It is no secret that T's network is badly in need of upgrading to current industry standards, so that they can compete with Qwest, Sprint, Worldcom, Level 3 etc.
It is clear in my mind that the good ole boy network failed to deliver as promised. Lucent is not even a serious contender for much of this business.
I believe we have only seen the tip of the iceberg on this deal. Those pundits who state otherwise may be in for
a very rude awakening.
Morgan Stanley believes the stock is overvalued, W.R. Hambrecht believes it is undervalued. So who do you believe? I personally ingore the pundits, perform my own dd, and draw my conclusions based upon the data at hand and a fair degree of insight.
In my view, I see this contract as a precursor of more to come, much more. Morgan Stanley even alludes to a CoreDirector contract. If they then believe that, then why the downgrade? Is the company being manipulative? We shall see.
We shall also see more of this business arrangement. All it takes is a little foresight.
Insofar of the $50 million being baked in the cake, who really cares? The real story is not $50 million or $100 million, it is billions of dollars....net to Ciena over the next few years.
Jack Hutchison |
