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

To: Ibexx who wrote (12481)	9/1/2000 5:47:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 24042

From thestreet.com Oh To Be in Denver, Now That Opticals Are Here By Adam Lashinsky Silicon Valley Columnist Originally posted at 7:00 AM ET 8/30/00 on RealMoney.com Wonk Alert Denver's the place to be this week for market pros seriously interested in optical networking, those newfangled networks that run on light impulses rather than electrons. The event is the National Fiber Optic Engineers Conference, the annual meeting of a bunch of folks who must be tickled silly that the rest of world suddenly is interested in them. Tom Astle, a Merrill Lynch analyst who watches the optics world from Canada (home to Nortel (NT:NYSE - news) and the part of JDS Uniphase (JDSU:Nasdaq - news) that isn't in Silicon Valley), reports to clients that the major themes he's been watching have been confirmed in Denver: It's tough for optical companies to get parts (that's good for component makers); the industry still is in its early stages (that's good for momentum investors); and Nortel is getting bigger and bigger (that's good for Nortel). Indeed, Astle notes that California market research firm Dell'Oro Group used the Denver conference, which runs through Thursday, to announce that Nortel's market share for global optical systems has risen to 43% this year from 29% a year ago. "Nortel's the play," he says of the old Canadian phone-equipment company whose shares, at 80, are up sixfold over the last year. Logic would suggest, however, that optical-networking companies constitute an Internet-like bubble given the eye-popping valuations the public awards stocks like JDS Uniphase, and the sums companies like Applied Micro Circuits (AMCC:Nasdaq - news) shell out to acquire targets like MMC Networks (MMCN:Nasdaq - news) (AMCC agreed Monday to buy MMC, which had 1999 sales of $70 million, for $4.5 billion). But the heat of the moment clearly is no time for people to take seriously the notion of investment bubbles. "I didn't hear one person mention it," counters Joe Noel of Pacific Growth Equities in San Francisco, who follows companies that make testing products for optical networks. Noel, phoning in from the conference, suggests that an "if-you-make-you-can-sell-it" mentality persists in the industry, judging from the mentality in Denver. Noel reports seeing more than a hundred booths for small optical-component makers, each undoubtedly hoping to get purchased by JDS, Corning (GLW:NYSE - news) or another optical aggregator. An amusing twist, he notes, is that where many companies normally tout their products at conferences like this one, these companies use their wall space to look for new employees, with "join our team" banners being the most prominently displayed. It probably takes a veteran Internet watcher to put all this in perspective. "Optical is where the bubble is now," says Brian Oakes, a longtime media analyst with Lehman Brothers who helped hype Net stocks (the same ones his successor, Holly Becker, is knocking down now) before joining Cendant as its top Internet dealmaker. "But the bubble could go on for quite a while. After all, the Internet bubble lasted three years longer than anyone thought it would." Well said.