Chris, of course it's possible that CIEN will be at 63 by yearend, but, IMO, it's highly unlikely. I think it's more probable at 20. I believe most of the recent buyers are short term momemtum players rather than the long term buy and hold type who will surely wait past August. Therefore, the fact about these 70 M shares to come is not important to the short term buyers.
At today's price, Ciena has a market cap of ~ $5 B, several things must happen for its stock to go up further:
(1). The venture capitalists decide not to sell their 57 million shares. At a cost to them of 50 cents/share, they rather leave their investment in the company and become long term investors because there are no more attractive ventures out there.
(2). Although having left the company to pursue his own venture, Dr. Huber decides not to cash in his $300 million stake in the company. So his 6.2 M shares will be left untouched.
(3). Other company insiders and employees also decide not to sell their shares in hope for a higher return.
(4). The company announces a signing of a contract with ATT worth several hundreds of million dollars.
(5). The company announces new major customers (Wireless Cable is not really a new customer, the GEMINI project is partly owned by WorldCom).
(6). Complete absence of competition progress (no more LCI or the like annoucing their success at comparable and/or superior products).
(7). The Dow and Nasdaq continue to enter record territories.
(8). No cautious articles from Barrons.
My take is the chance for CIEN to go down, by far, exceeds further "irrational exuberrance" in this stock.
Regards,
Tom |
