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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: John Waddell, Ph.D who wrote (7965)	3/23/2000 12:41:00 AM
From: quidditch	Read Replies (4) \| Respond to of 24042

I couldn't disagree more, for a variety of reasons: 1. but it doesn't seem that difficult to me to simply guarantee Alcatel and others that there will be no price increase for 18 months. This would leave plenty of time for a GLW or another competitor to ramp up production. With all due respect, this is just foolish: (a)How could JDSU guarantee anyone, let alone "others", that there will be no price increases for such a period of time? This ignores potential market conditions, possible supply constraints affecting JDSU's own suppliers, other materials costs and market economics. (b) Why would JDSU(/ETEK) want to afford a potential competitor a completely level playing field? What, then, will be the business and financial rationale of what may be one of the key objectives of the business combination? (c) A guarantee of "no price increase"--I can imagine LU, NT and CIEN all clamoring for equal treatment with respect to other components and modules. This is not a centralized economic model with which we are dealing. 2. JDSU and ETEK have entered a contract--an agreement of acquisition via merger: The price consideration/cost savings/financial projections and, perhaps, specific legal terms and conditions, bear upon the way the two companies will (hopefully) meld their businesses. I don't think that one necessarily begins to monkey with the potential synergies that have been developed by the businessmen and optical engineers--unless you have to. 3. Competitive considerations in the optical components market: Because of 1(b)-(c) and 2 above, I think it is paramount to keep any and all potential negotiations with the DOJ (and ALA, if it comes to that) on supply and price considerations on thin-film filters absolutely confidential and disclose only the fact of a deal if one is necessary. To disclose to the market at large what you might be willing to concede by way of price and supply is not good business practice. 4. ALA's motives are not necessarily pure as the driven snow! ALA is trying to establish its US market share in the worst way. Significant acquisitions all the way back to DSC Communications in 1997 or so, then NN and others in between--ALA would love to improve its competitiveness WRT LU and NT and in other spaces. This was a cost-free hand grenade for ALA. 5. The ALA "opposition" arises out of a governmental oversight proceeding (HSR) involving a government agency's attempts to identify the existence of possible anti-competitive aspects to the JDSU/ETEK combination. At this time, the proceeding is investigative and fact finding in nature. As yet, DOJ has concluded nothing in a legal or business sense. Why would JDSU lie down and give up ground at the first sign of a customer's whining? (I don't dismiss out-of-hand ALA's point--I use the word whining to make a point.) I don't believe that JDSU owes the markets anything in the nature of a public statement at this juncture. If the HSR process has come to this point, then let it play out among the participants, i.e., JDSU, ETEK, their customer universe and components market--and the referee--DOJ. If a deal needs to get done to pass muster with HSR, cut a deal in private, without the distracting rabble of a public forum. And, if it comes to this: announce in public what represents the final concession that is necessary to get the deal done, if the players want it done under those terms. Just MHO - Steve