Doug,
I agree there is more to this story than we know. I would like to remind you that as far as the street is concerned; it's all about earnings and future earnings for CIEN. With all these lost contracts, ie, ATT,DTeleport,and WCOM and SPRINT adding other vendors, the picture is somewhat unclear for the moment. Granted CIEN just added Japan Telecom, it seems like an upgrade of equipment rather than a new contract. BTW, Nettles still feels that CIEN is ahead of all its competitors, so that's a PLUS.
The downside is something I am no good at. I imagine we have already seen the downside in 10 3/4. Your reward is the possible buyout by CSCO, or LU or ASND for the short-term. The reward for the long-term could be a lot higher than the short-term potential. Long-term would have to depend on contracts that CIEN can secure, their lead in DWDM technology, and winning the confidence of investors and analysts.
TLAB gave up on the merger because the stockholders (the voters) mostly institutions were against the deal towards the end, especially @ 0.80 TLAB for 1 share of CIEN. I believe (another reduced offer) was made, but that CIEN decided to part amicably. CIENA's decision to walk amicably stems from the belief that Nettles (CIEN CEO) feels the company is worth much more than the price of the stock indicates at the present time.
More than TLAB, I see a better fit with CSCO or ASND. The data networkers are rushing to establish their objectives with voice over IP. Lucent is already into DWDM, and if CSCO and ASND are to compete with this giant, they must make preperations today. Remember Lucent announced that they would catch up with CIEN's technology in about 9 months time. Summer of 99.
The bottom line is that investors are plain scared, and since the institutions are rattled about CIEN's future, the price of the stock has become so low. The moment the picture becomes a bit clearer, the stock will go up a lot. Ialso agree that bandwith solution company like CIEN with the most advanced technology in its field is having problems is a cause for alarm for the institutions. The problems I am refering to are the lost contracts and overall lack of business.
Finally, I think CIEN needs a good sales team, better organized under better management. It wouldn't hurt to get hooked up with a name that sounds reliable, kind of like "been there for a while" like TLAB,CSCO,ASND,LU et al. CIEN is new, and when big companies like WCOM,AT&T give you an order for 100Million dollars it would help if they knew you were RELIABLE. |
