Well, the comparison to APM is interesting, but completely irrelevant. Other than the fact that both companies were once high flyers, their businesses have nothing in common. And if you think APM will eventually come back, you are mistaken. They will never come back. They are behind the technology curve in a no margin business (disk drive heads), with essentially no customers. The only worthwhile asset in the company is its stagnant manufacturing capacity for MR heads, and with the glut of drives out there, even this is of essentially no value to larger player like SEG or QNTM.
CIEN on the other hand, is ahead of the technology curve, and has technology coveted by at least two companies, TLAB, and presumably CSCO. And likely others as well.
They just need to come to grips with the fact that they need to align with a larger player in order to effectively compete, and not be so susceptible to the loss of a contract or two. A month or two languishing in the low to mid teens will help them reach this conclusion. Then the company will be actively shopped and sold.
On the first bounce, I will likely hedge my position with some cheap puts just in case things get even uglier than I expect. Although the pain is not too severe yet, it hasn't been fun.
gary |
