[cnbc]
hi shlomi,
thought you might enjoy the transcript of the cnbc piece last week... shows how orctf is being presented to the usa... seems like doug sease (wsj editor) "simplified" the issues surrounding current forward pricing (and addressed by cost reduction program) by attributing current earnings losses to "production facilities" (as well as correctly to r&d)... but i might be jumping to conclusions... have you heard of any issues related to production facilities?
thanks in advance,
s
the full transcript courtesy of d herman... :
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"August 26, 1998
5:00-6:00 PM
CNBC-TV
Market Wrap
Maria Bartiromo, co-anchor:
Well, today marks the second installment of out weekly segment on Market Wrap we call "Sease On Stock". Every Wednesday we will be speaking with Doug Sease. He's the editor of the money and investing section of The Wall Street Journal.
We'll speak about stocks that he thinks are under-valued and are good bets. How does he come up with them ? By taking to a host of fund managers on Wall Street.
Doug joins us live now from the World Financial Center in New York City. Doug, what are you hearing ?
Doug Sease (Wall Street Journal):
Good afternoon, Maria. Well, I've been talking to Bob and Dave Kearn of Kearn Capital Management. These guys run money for private trusts, they're advisors to the Freemont Funds. They're looking for small, very innovative companies and one of the ones they suggest is a good bet these days is Orckit Communications.
Now this is a little company that basically uses xDSL technology. That's tech talk to basically speed up access to the Internet over copper cable. Your telephone wire basically. You don't have to [have] any of this fiber optic cable. So, it's a bet on an existing infrastructure that's already in-place.
What they like about Orckit is that it's trading at about 15 and if you look at a chart of their stock, you'll see that the price is going down. There's a very good reason for that. Orckit is going to have a net loss this year more than likely.
The reason for the net loss though is that they recently won a big contract from GTE, and they're wrapping up both R&D and production facilities right now and that's making a bit hit on expenses.
Bartiromo:
Doug, we're looking at a chart right now and it certainly has come off of its hieghts of the year.
Seaese:
Yes.
Bartiromo:
Is there a catalyst that you're hearing that may actually turn this situation around ?
Sease:
Well, this GTE contact I'm talking about is going to have some very good implications longer term. You look at revenue growth for the company - 27 million last year; will probably hit 40 million this year, a hundred million next year, if the Kearns are right on this prediction. So, that's really great.
Besides that, Orkcit isn't confined to the US market. They're bidding right now on a big contract with Deutsche Telekom. If they win that, what you've already seen in revenues here in the US will ratchet even higher.
So that basically, the Kearns are making a bet here that this net loss this year, forget about that, look forward, seventy cents probably in 1999, and the stock should pop once all those factors are in-place."
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