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Technology Stocks : Ciena (CIEN)
CIEN 178.17+1.0%Nov 21 4:00 PM EST
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To: Tim Bagwell who wrote (500)7/8/1997 12:22:00 AM
From: Tom Hua   of 12623
 
Tim, I agree that not 100% of the lock-up shares will be sold on Aug 7. But I disagree with your thinking that

>>These people get paychecks too and there's no reason to speculate that they will rush out and try to sell their stock the same day. They all know that the stock will likely double next year so there is a huge incentive to hold.<<

Do you know that the venture capitalists hold 57 million shares? They make a killing from return on investment, and the neighborhood of 5,000% to 10,000% return ain't bad, they probably haven't seen a paycheck in a long time.

With regard to the stock doubling next year, it's more of your wishful thinking.

Some of the senior officers' stocks are worth tens to hundreds of millions of dollars. Paychecks mean absolutely nothing to these people. They have worked hard for this day (and I should say a dream comes true)and I think they want to and should be entitled to cash in and protect their profits. Even if the insiders think CIEN has a good chance for appreciation next year, it's still a good idea to diversify the portfolio, and nobody can blame them for that.

Your other point:

>>There shouldn't be any more effect on the shares than the day of the original IPO release. Flooding the market on the first day actually caused the price to increase, not decrease <<

There were only 4 million shares offered in the States in the IPO and there had been no shares available prior to that. Aug. 7 is entirely different. I fail to see an anology.

Regards,

Tom
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