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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: stan s. who wrote (65834)	10/14/1999 9:26:00 PM
From: Tim Luke	Read Replies (2) \| Respond to of 90042

well john chambers said they (csco) will be doing a lot more buying but they are not interested in coms. and now this about cien.....all which makes cs look even more attractive...question is what kind of premium are we looking at now with the current price? . . Thursday October 14, 8:07 pm Eastern Time Ciena stock off on rumors of dilutive deal coming NEW YORK, Oct 14 (Reuters) - Shares of Ciena Corp. (NasdaqNM:CIEN - news) fell more than 11 percent on market rumors the telecommunications equipment maker may pursue an acquisition that would hurt its profits, analysts said. Shares of Ciena fell 4-3/16 to 31-5/16. More than 16.4 million shares changing hands, nearly four times its average daily trading volume. ''The stock is down on rumors that they may do a dilutive transaction, but I don't think there is anything to it. I don't think there's anything imminent,'' said Paul Silverstein, a telecommunications equipment analyst with Roberston Stephens. ''There's more rumors in the market about them and deals, but these rumors tend not to pan out,'' said another analyst who declined to be named. A spokesman for Ciena declined to comment. Last week, Ciena's Chief Executive Patrick Nettles said the company may be open to small acquisitions in the future, but he did not specificy a time frame for possible or any likely targets. Silverstein, who reiterated a buy rating on the stock, said the drop in the share price created a good buying opportunity. Ciena's dense wave division multiplexing (DWDM) business continued to rebound and the company this week landed contracts with Germany's MobilCom AG and Sweden's Telia AB, Silverstein said in a research report. Ciena also is in the process of entering four new markets over the next six months that will expand the company's market opportunities by more than five times, Silverstein said. Silverstein said he expects Ciena to to meet Wall Street's consensus fourth estimates of $135 million to $140 million in revenues and earnings of $0.03 a share. Gross margins are on track to meet or exceed consensus expectation of 40 percent. Silverstein said he does not expect Ciena to show significant revenues from OC192 products since the company is still in the process of ramping production. He expects OC192 sales to contribute to results in fiscal 2000.