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Technology Stocks : Ciena (CIEN)

CIEN 207.43

-0.6%

Nov 11 4:00 PM EST

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To: Roger A. who wrote (2409)	8/22/1998 10:03:00 AM
From: Gary Korn	Read Replies (2) of 12623

Roger, My guess is that the deal gets renegotiated, perhaps at Tuesday's board meeting. According to Market Guide, institutions own some 80% of TLAB. I don't see how Birck can sell them anymore on the concept of a 1:1 transaction with CIEN. I realize that he has to outbid CSCO (or whomever), so that does put a limit on how little he can offer. If there is simply no other DWDM acquisition candidate out there, and no way to replicate the technology, then perhaps the 1:1 premium can somehow be justified even without $100M of T revenues and even with the risk of having to share Sprint and WCOM revenues. However, this kind of analysis has to be done first if the institutions are going to buy into what was becoming a costly purchase of technology more than accounts. Gary Korn

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