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

To: Lane who wrote (11869)	7/25/2000 10:57:45 PM
From: KM	Read Replies (1) \| Respond to of 24042

Worth consideration: This just in. 7/25/00 9:02 PM ET Re. JDSU: Diane Garnick of Merrill's equity derivatives team reports S&P indexers will need 57 million shares -- or 3.7 days of normal volume -- of JDSU to obtain the "appropriate" exposure. What she called "excessive trading" due to short-covering and unwinding of the JDSU-SDLI arbitrage position on July 20-21 was significant enough to meet indexers' demand. "These factors point to a risky close on July 26," according to Garnick. "Given the earnings announcement after the close of July 26, active funds may not wish to extend their holding beyond the close." Additionally, MER estimates index mannagers will need to raise $7.4 billion to purchase JDSU and such activity could pressure the broader index. Just an FYI for the night owls.... none (from realmoney.com - thestreet.com)

To: Lane who wrote (11869)	7/26/2000 7:02:45 AM
From: t2	Respond to of 24042

Lane, I don't think JDSU was lower on that article. I think it really had more to do with Bob Pissani's (CNBC) and possibly the Merrill Lynch comment on realmoney.com. Of course we had that late comment on realmoney.com that stated things are not as simple as Merrill comment suggests. It is no surprise that the stock is back to 130 this morning. RE: the article (bloomberg) you posted. Limited Suppliers Because Nortel uses a lot of advanced parts, it has only a limited number of qualified suppliers. ``As we see the market tighten up in terms of the choice that we have to deal with, that makes it even more of a concern,'' Roth said. Roth said Brampton, Ontario-based Nortel is concerned enough to spend $1.2 billion to more than triple its own production of fiber-optic components in the next 18 months. It announced the investment plan yesterday. ``That's part of the rational for a fairly large investment in Nortel to ensure that we have choice of supply in the components that are very critical to us,'' he said on the call. Chief Financial Officer Frank Dunn said Nortel is confident it will have the components it needs this year. It's expanding production to make sure it has enough supply and choice 15 months to 18 months from now, he said. Most equipment makers like to maintain at least two main suppliers of key components. That helps to ensure they can always find enough if one supplier runs out, as well as pressure vendors to cut prices. It appears NT is concerned about supply down the road and that can't be a negative for JDSU, IMHO. They must see this supply problem continuing into next year. To me that means NT management feels that even after the expansion at the various component suppliers, there could still be a supply problem. Remember JDSU will have an easier time using up its capacity than NT would. JDSU will be the prefered supplier as it does not compete with its customers. If NT is still expanding aggressively, it would mean that they may not be able to get their components externally. In addition, note that NT is reportedly in serious talks with Corning to sell its component business in return for 1/2 of the company. That could be their real reason for comments. Even if the JDSU/SDLI deal was not done, I bet NT would have continued with these expansion plans. Now they have something to talk about as they try to seal the Corning deal----which I think is right around the corner.