To: Jane4IceCream who wrote (38642 ) 10/18/2000 12:19:36 AM From: KevinThompson Respond to A little optical commentary from Briefing.com:Optical Competition : We are just beginning to see the impact on the optical sector of an approaching IPO onslaught. The growing line-up of optical IPOs brings with it two threats to valuations in this sector: first, it offers competitive investment alternatives in a sector where valuations have benefitted from a supply/demand imbalance; second, it offers a reminder that the business competition in optical is heating up as well. Today's lesson comes from Optical Communications (proposed ticker: OCPI), an optical components company that is preparing for its IPO. Briefing.com is hearing that as a result of the buzz coming from its pre-IPO roadshow, some competitors' stocks are under pressure today, including Finisar (FNSR -6 1/8), Stratos Lightwave (STLW -3 5/16), and MRV Communications (MRVC -4 5/16). While we don't know enough about Optical Communications' products to know if the declines in these stocks are justified, we do know enough about the optical sector to know that this scenario is likely to be repeated many times in coming months. Remember all that venture cap money that used to be flooding dot-coms? It's now inundating the optical sector. We have been compiling a list of private companies in the optical business -- in the components space alone, for example, we already count 30 companies with 6 filed for IPOs. And that list probably represents just a fraction of the component companies in existence -- we can barely keep up with the daily additions. No doubt current component leaders JDS Uniphase (JDSU), New Focus (NUFO), and Bookham (BKHM) have longer lists. High profile optical IPOs in other sectors are also in the works. Late last month, optical switch-maker Tellium (proposed ticker: TELM) filed for its IPO. You can bet that as that pricing approaches, there will be some nervous investors in Sycamore (SCMR), Ciena (CIEN), and Corvis (CORV). The ranks of the terabit router companies will also expand, with newcomers such as Charlotte's Web, Ironbridge, and Pluris hoping to go public next year and challenge Cisco (CSCO), Juniper (JNPR), and Avici (AVCI). The list goes on. The lesson for investors is that there is more competition out there than you know. Cisco, Juniper, and Avici might be the only publicly traded terabit router vendors, but they are by no means the only contenders. The optical sector is still very fluid, with the winning technologies far from being determined, and the competitive playing field becoming more crowded by the day. - Greg Jones, Briefing.com
