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

To: Madharry who wrote (22557)	7/28/2000 12:52:29 AM
From: signist	Read Replies (1) \| Respond to of 42804

and we are down 11- 1/2 points....Preview of a Contender Mark Savolainen Smith 7/27/2000 02:10 MRV Communications (MRVC) files to spin off Luminent (LUMN) Making good on past promises, MRV Communications (MRVC) yesterday filed a form S-1 with the SEC formalizing the spin-off of its fiber-optic component division as a separate company to be known as Luminent. It will be traded on the Nasdaq under the symbol "LUMN" . The timing looks good for Luminent. In spite of general tech market weakness, valuations for fiber-optic component makers are reaching mind-numbing levels. Many analysts feel seemingly astronomical valuations are justified due to a combination of almost unlimited demand, strong profit margins, and the paucity of companies with the required expertise. Luminent manufactures fiber-optic components: high-performance laser diodes, ELEDs, detectors, transmitters, receivers and transceivers. These components, long considered the mundane nuts and bolts of the optics business, are now being recognized as the indispensable and critical building blocks of the coming optical revolution in telecommunications and data networking. Today there are only about a half dozen publicly traded companies for which optical components are the primary business. Fewer still are able to provide both active and passive technologies. Thanks to timely acquisitions earlier this year, Luminent is on this elite-of-the-elite list. Management Team For some time Noam Lotan, MRV's CEO, has been reassuring anxious analysts that when the time came to announce Luminent's CEO, no one would be disappointed. At the time of this writing no formal press release has yet been made regarding the management of Luminent, but thanks to the S-1 filing, the news is out. MRV has delivered an experienced and respected CEO from none other than Lucent. Luminent's CEO is Dr. William R. Spivey who until recently served as Group President of the Network Products group of Lucent Technologies. Prior to that, from February 1994 to September 1997, he served as Vice President of the Systems and Components Group, member of the Office of the President and Co-chair of the Executive Committee of AT&T Microelectronics. Spearheading relations with Wall Street, will be Eric Blachno, Vice President of Finance, CFO and Secretary. Prior to joining Luminent, Mr. Blachno served as Managing Director of Research for Pennsylvania Merchant Group, an investment banking firm, where he headed its Technology Group and served as Senior Communications Equipment Analyst. Coming over from MRV is Dr. Mark Heimbuch, who is now serving as Luminent's Chief Technical Officer. From March 1997 to June 2000, he served as Director of R&D for the optical components division of MRV. Underwriting Syndicate Notable as well are the blue-chip underwriters for the IPO: Credit Suisse First Boston, CIBC World Markets, FleetBoston Robertson Stephens, U.S. Bancorp Piper Jaffray and First Security Van Kasper. MRV has been counting on this IPO to increase its coverage by Wall Street. Of the underwriters, only First Security Van Kasper has been telling MRV's story. Look for this to change in the not too distant future. Tax Free Distribution of Shares MRV has indicated in the past (as reported by Israelinvestor) that it intended to distribute shares of Luminent to existing MRV shareholders. The S-1 filing shows that it intends to honor that commitment. Under the terms of the separation agreement, MRV will own at least 80.1% of Luminent's outstanding common stock following this offering. If all goes smoothly, within 6 to 12 months after the date of this offering, MRV intends to distribute shares of Luminent to MRV shareholders tax-free for U.S. federal income tax purposes. This process is subject to many conditions, not the least of which is a private letter ruling from the IRS. Due to the complexity of the spin-off and share distribution, and the stakes involved, expect much more information on these to be forthcoming soon. In all likelihood, more than a few very pointed questions will be asked this very afternoon in MRV's Q2 conference call. israelinvestor.com