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Technology Stocks : LUMM - Lumenon Innovative Lightwave Technology Inc. -- Ignore unavailable to you. Want to Upgrade?

To: dds1 who wrote (1648)	3/24/2000 3:49:00 AM
From: pat mudge	Respond to of 2484

1.Is their any possible scenario you can visualize and express where a company in Lumm present position could be successful for its shareholders. If not what would be your suggestions to the company. * Accepting the fact their agreement with Molex is binding, they have to live with the reality of needing to satisfy one customer and bring their products to market as fast and with as much efficiency as possible. Being able to fabricate 20 chips a day in their pilot facility doesn't seem as formidable as building a new factory, installing it with untested equipment, getting lines qualified, and finally obtaining yields that will make a profit. Even experienced companies like SDL have to work hard to increase their yields. It doesn't happen overnight. * The above challenge includes financing. If they do a secondary, they'll have to convince investors their Molex relationship will be profitable and sustain them anywhere from one to four years. I'm 99.9% sure they won't be able to win vendor financing other than from Molex. The normal stages of pre-IPO development go from angel funding to VC funding (some times several rounds) to vendor funding and then Investment Bank-IPO underwriting. By skipping the last two stages they denied themselves the critical support of future customers and analyst coverage of IPO underwriters. Now they're stuck with one vendor, Molex, and one analyst, Groome Capital. "They also tell you how they are making every optical component product that can possibly be made. They make Optical Add-Drop Multiplexers, Optical Cross Connects, Photonic Switches,8, 16, 32, 64 and 128 channel DWDM" 2.Does Lumm have a reasonable chance to achieve the fabrication of the above list of products. If not why. I honestly don't know what the chances are of their fabricating all those products. There are many companies who already make them so LUMM will have to prove theirs are not only better but cheaper. As an investor, I wouldn't value the company on products I hadn't seen and on efficiencies that relied on facilities that hadn't been built. I was an investor in Ciena before the Tellabs fiasco, and it seems the most important variable in the success of these companies is the ability to bring to market products that this sector needs. That appears to overcome all obstacles. If you were an early Ciena investor you'll recall how reliant they were on Sprint in the early days and what happened when Sprint decided to push out deployment several months. It was dress rehearsal for the Tellabs debacle. I believe they represented more than 50% of sales, but certainly not 100%. In looking at start-ups I look at 1) management with proven leadership 2) strong patent portfolio 3) cutting-edge technology that will leapfrog what's already available and 4) quality investors --- who else has found the company worthy of risk. Experienced management might not be in place from day one, but they sure as heck are before they go public. I wish I had a blueprint for success but some of the essential steps were skipped and I don't know how you make that up. If I were Lumenon, I'd spin the Molex relationship for all it was worth and hope investors bought it. Pat