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Ciena Surges Amid Takeover Speculation,
Sprint News
Dow Jones Newswires
NEW YORK -- An 11th hour surge sent shares of Ciena Corp. (CIEN) up
12% Tuesday amid continued takeover speculation and repercussions from
Sprint Corp.'s (FON) newly announced ION network.
Shares of Ciena Corp. (CIEN) were up more than 2 for most of the
afternoon, but experienced a sudden and rapid surge of more than 3 1/2 in
the last half hour of trading.
All told, Ciena closed at 57 9/16, up 6 3/16, or 12%, on a volume of 5.7
million shares compared to average daily Nasdaq volume of 2.6 million
shares.
Traders speculated that the rise was caused by short sellers covering their
positions amid continued speculation of a buyout. It was a view shared by
some participants on Internet message boards.
Ciena has long been the topic of takeover rumors, which began to heat up
again last week within the trading community.
Others pegged Tuesday's stock movement as a pleasant backlash from
Sprint's announcement of a new, in-process national phone network capable
of simultaneous use of the phone, Internet and other data services.
"The stock got a good start on the day, tied to the Sprint announcement,"
said Soundview Financial Group analyst Kevin Slocum. "I think you
probably saw some reiteration of 'buys' from analysts based on network
architecture pushed by Sprint."
Ciena creates the DWDM technology used by Sprint's new so-called
Integrated On-Demand Network. And ,one of the companies rumored to
be interested in buying Ciena, Cisco Systems Inc. (CSCO), also is a
technology provider for Sprint's new network, Slocum added.
"You heard the rumors a week ago about Cisco. I think the fact that Cisco
is one of the lead players that Sprint has turned to in that network plan has
probably spurred on the stock," Slocum said.
Still, there was little information available from analysts or traders as to why
the stock enjoyed such a drastic surge so late in the trading day.
A spokesperson for Ciena was not immediately available for comment.
-By Johanna Bennett; 201-938-5670
Briefing Book for: CIEN | CSCO
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