A friend just sent this via email and it appears to be out today. It's true Ciena could be out-muscled by bigger players, but the question remains, When? And how Alan Jacobs can say they won't make earnings is beyond comprehension because I know for a fact the company would not have said that.
Does anyone know how much influence an article like this might have?
Later --
Pat
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Silicon Saturday: Ciena, Broadcom,
Cdnow and Amazon.com
By David Landis
Special to TheStreet.com
5/9/98 12:15 AM ET
A selection of some of the most intriguing tech stock
ideas on the Web. The items presented do not represent
the views of TheStreet.com; rather, the collection is offered
as a service to our members who may be scanning the
Web for stock-related information.
Ciena
Forbes.com (5/5)
Ciena (CIEN:Nasdaq), maker of high-capacity fiber-optic
systems, landed a one-year, $10 million contract to
increase the capacity of Hermes Europe Railtel's
fiber-optic network in late April. The stock jumped more
than 3 to 52 1/8, and Merrill Lynch upgraded it to
near-term accumulate from neutral. Unimpressed,
Forbes.com warns that the company is being outmuscled
by Lucent and Nortel, among others.
Ciena's division multiplexing systems (DWDM) have
leapfrogged competitors' systems and can increase a
fiber's capacity as much as 40 times. But Ciena spent only
$23 million on research in 1997, while rival Lucent spent
some $3 billion more. Ciena also faces competition from
telecoms like Nortel, Alcatel and Siemens, all of which
offer switches, fiber-optic transmission terminals and other
equipment that Ciena doesn't have. Ciena is trying to plug
these holes with partnerships with Cisco and ATI
Telecom International, but "Ciena is going to be on the
treadmill of always having to come out with new technology
first. They don't have the distribution or pricing power to
muscle other people out," says Michael Neiberg of
Furman Selz.
Alan Jacobs of Avalon Research Group figures the stock
could trade as low as 27. It is now around 54. "Whatever
the Street is expecting, they won't get" from Ciena's
earnings, due later this month, he says.>>>>
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