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Politics : Ask Michael Burke

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To: Bald Man from Mars who wrote (31417)	8/23/1998 5:15:00 PM
From: PaperChase	Read Replies (2) of 132070

Bald Man. The TLAB/CIEN merger is a pure gamble because noone knows what is going to happen. There aren't many variables to predict with a high degree of certainty what will happen next. This is why I have chosen strangles and straddles on these stock but I recognize these are damned expensive and highly speculative options plays Given your long and short equity positions you may want to consider option purchases (in ADDITION to the recommendations in other posts) that cap your losses. For example, if TLAB runs away to $80 because of a failed merger, you will need 3 contracts just to cap the losses in your TLAB short position. I wish I could tell you which way these stock will go. We don't really know how much pressure the TLAB president is getting from big TLAB shareholders over this CIENA deal. We also know that TLAB needs a foot in the door on DWDM technology. It is my GUESS now that TLAB will buy CIEN in a .75 to 1 offer. If it gets down to .50 to 1 (where we are now with stock prices) then TLAB would really lose face for screwing up the original valuation of CIEN. Remember this is a GUESS. Good luck.

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