Sam, Alcatel has a wide array of products to offer in this pact with CSCO. Per the announcement today, "the pact may be extended to include Alcatel's Sonet/SDH fiber-optic transmission system".
Ciena has generated impressive sales/earnings from a single product, the only company product. Ciena is like a specialty retailer but to make it big, they need to stock up the shelves with more varieties. And they also need to dramatically increase store traffic (The last time I checked, they still have only 2 customers). In my opinion Ciena is surprisingly light on R&D spending. Without sufficient R&D, the pipeline will remain dry or empty. We all know that high tech evolves rapidly, the half-life of a new product, on the average, is about a year, give and take. Perhaps the company is discreetly working on new products (other the upgrade of MultiWave 1600), perhaps not, I don't know.
I feel comfortable with my short position. In fact, I shorted more this morning @ $50.
Regards,
Tom |
