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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: WebDrone who wrote (14494)	7/16/1999 9:54:00 PM
From: Sector Investor	Read Replies (1) \| Respond to of 42804

<<The crux is that NA and Charlott's are getting MRVC technology without compensation to the investors.>> That is a bunch of sour grapes, IMO. He exited a few points ago, after covering a short position and hasn't posted since, I believe. First off, they haven't even finished acquiring them yet. How do they spin off what they haven't fully acquired yet? I don't know the CW situation, but NAC warrants were in 2 installments, 7/1/99 (should be completed) and 1/4/2000. They should own about 40% right now and 60% after the warrants are fully exercised. Message 8648120 Secondly, the timing of an IPO is very important. Value is higher when contracts have been won and product is shipping. NAC is closer than CW in terms of sales and shipping. I think NAC has an unconfirmed sale of MetroFusion that ships in the next 1-3 months. CW is probably 3-6 months further behind with product, so the warrant situation may also extent further into the future (which is supported by the fact that the CW ownership situation is NOT in the 1998 10-K). Thirdly, the earnings of MRVC's other acquisitions that they have a majority position in, flow to their bottom line (I'm sure NAC and CW will too), so he is just plain wrong on this. This info was also from the 10-K (Kempton is now called Hyperchannel): techstocks.com

To: WebDrone who wrote (14494)	7/17/1999 11:02:00 AM
From: Bruce L	Read Replies (2) \| Respond to of 42804

<What is your feeling on the NA and Charlotte's situation?> Web: As one who struggles with the technological side, I'll take a stab, but from a non-tech perspective. Roktar has two points. First, he asks why MRVC should have to settle for a 60% or 66% stake in these two companies with admittedly promising technology when MRVC could -he assumes - have had 100%. Second, he questions the ability of MRVC to "execute" successfully a business plan to develop these technologies. The second question is the easiest. Roktar is equating MRVC's disastrous August '98 stock plunge for proof that the company executives lack an ability to execute. The fact is - as all of us regulars know - that Noam & Co executed beautifully for 34 consecutive quarters of earnings increases through July of l998. Even if they did so by concentrating on pedestrian networking products with less than the most advanced technolgies, I think their record was nothing short of amazing when you remember that they were competing against Cisco, 3COM, CS, Bay, NN etc, and - to me - it is stupid to claim otherwise. Against these competitors, and building the business from "scratch", they almost had to start at the low end. But they put together the engineers and the world-wide sales force that for 8 1/2 years stole business from bigger and more established companies. And then in Aug '98 they preannounce a 10% earnings shortfall, they maybe miss a product cycle, and they invest a hell of a lot of the company's resources into breaking into cutting edge networking products. So Wall Street decimates MRVC's stock. What does this prove? To me, it only proves that we were in a period where the street hated small caps. But that's changing. (I think.) But the point is: these boys do know how to execute. TRACKING STOCKS AND THE NEED TO MOTIVATE TALENTED PEOPLE Just yesterday, I heard that MSFT is considering creating a "tracking" stock to unlock the POTENTIAL stock market value of some of its internet properties. Necessarily, it cannot own 100% of the stock for the market cannot trade what it cannot own. Other big companies such as TimeWarner, IBM, INTC have, or are considering doing the same. Why can't a little company like MRVC do the same thing? I think it was Frederick the Great who said: Those(generals) who try to defend everything, end up losing everything. Only if you're a Cisco and #1 with unlimited resources can you even contemplate keeping it all in-house. I must admit that when I first heard of the plans to create the 3 partially owned startups, I had some of the same questions as Roktar. There is still the question of trust. It is certainly possible that Noam, etc are trying to divert company resources into their own, or relative's pockets, but this inherent in every case where a partially owned start up tracking stock is used. I, for one, give MRVC's executives the benefit of the doubt, but believe that under the circumstances MRVC could not have broken into the big time without this mechanism. Bruce