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

To: Greg h2o who wrote (22801)	8/3/2000 4:42:35 PM
From: Sector Investor	Respond to of 42804

<<help me,sector.... what else did you find significant in their presentation from a technical standpoint....>> OK, ok it's time I did a little work here again. I will post something (or multiple somethings) tonight. One big thing that should be obvious is that their equipment is now targeted at BOTH the core and the edge. That broadens their target market TREMENDOUSLY. AND it means that customers can set up networks where CW edge boxes will be talking to other CW core boxes. This should minimize compatibility and cross-vendor issues. ARAREA-2 (first real mention I've heard) will have a 640Gbps fabric - whew! MRVC's initial investment in CW was $8 million. more later.

To: Greg h2o who wrote (22801)	8/3/2000 10:27:17 PM
From: Sector Investor	Read Replies (4) \| Respond to of 42804

Greg, you asked for a bit of help on CW. Here is my opinion. Here are some notes/excerpts from the presentation. The speaker, the president of CW spoke conversationally during the presentation, with no emphasis on anything. Emphasis is mine, because what he said is IMPORTANT. Israeli startup in 1998 with 5 people, 2 from Nbase, 1 from COMS and 1 from INTC. They are very strong in Software and ASIC design. They are near TECHNION and they have VERY CAPABLE PEOPLE on staff. Products now ARANEA-1 ARANEA-1 Lite ARANEA-1 Cluster Initial funding and founding team gathered by MRVC - $8 million "seed money". Round A is closed - $100 million dollars. MRV, 2 strategic partners and a MAJOR Investment bank invested. Now into Round B $300 million. MRV will again invest. Looking for other founders. Plan to use it to build their Marketing and sales and building some more evaluation units. [Note. From the CC, Noam said they had already built evaluation units "in the teens". Let's guess 15 units. From an article published last year and that was available off their website, we know that the ARANEA-1 is a "seven figure" box, so this is quite an investment in evaluation units. Current Status PASSED SUCCESSFULLY two Beta sites, one a MAJOR US Carrier and another a strategic partner. Another BETA starts next week in a VERY LARGE European Telco [how many fit the "very large" tag? ALA? DT?] and in the next month start in other MAJOR US Carriers. There has been a lot of interest in the box, and now we are talking with some other US carriers. Also, we are talking with Israeli Telcos also to put 1-2 boxes over there. [Note. Perhaps ECILF?) Projected sales Q2-Q3 2000 in BETA Q4 2000 ship the first products and if all goes well, we hope to get to $8 million in sales by Q3 2001. Staffing 70 people. 95% engineers. Move to Boston HQ. Plan to have 100 engineers by the end of 2000. Now 50%-50% SW/HW engineers. Plan to be 2/3 SW engineers. [Note. OK, so they have about 66 engineers now, 33 Software and 33 Hardware, moving to 67 SW engineers, so almost all their hiring will be SW engineers. Translation - the box works people, but they want the best SW out there. ] Sector's comments Due to all the other MRVC newsmakers, LUMN, Jolt/Astrotera, Zaffire, iTouch, etc. CW has been able to keep moving behind the scenes and not drawing a lot of attention from the market - or from us on the threads. This is about to change. CW is about ready to rock and roll, and they are working with some MAJOR players. In a couple of years this will be a multi-BILLION dollar market. That $8 million in sales mentioned by Q3 2001, is going to look like pocket money by 2003. This is not like selling commodity items. With the big boxes selling for over a million dollars, these players must have taken a LONG (6 months or more) look at Aranea- AND THEY PASSED! Once established, these can be major revenue producing, LONG TERM relationships and customers can build out entire networks (edge and core) using CW routers. Also, their box design is UNIQUE. None of the other Terabit vendors have a cell based architecture, and none can handle both types of Internet traffic. Noone else will have a comparable box for several years at least. Once they begin selling, NO OTHER Vendor can provide a substitute. Then, think what is the going rate in buyouts PER ENGINEER? Chet White's valuation is conservative, IMO, because any potential buyout would value the engineers highly. This company VERY SOON is going to be WORTH a multi-billion dollar market cap. Note I said WORTH. What the market would assign in an IPO, or what CW could sell for now on the market is anybody's guess, but, since there are only a few of these Terabit companies, my guess would be $2-4 BILLION conservatively, perhaps more (it would be nice to be like Corvus) - and MRVC owns 53% I believe.