Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Oclaro, Inc. (Avanex-Bookham) -- Ignore unavailable to you. Want to Upgrade?

To: TENNET who wrote (820)	10/24/2000 11:37:02 AM
From: not925	Read Replies (1) \| Respond to of 2293

Big MO. <Very hard to hear/understand---not sure if it's the net or Mr. Cao's accent.> It's probably both. Actually I thought the video & sound quality was quite good given it's a webcast. For me, the subject matter is not easy to understand because the technology is not easy to understand, but my take from the session are a) 100,000 channels possible, and b) the general idea of 'cars vs. train tracks' topology. What Mr. Cao is saying is that with 100,000 channels possible per fiber (each fiber w/ 1,000 lambdas, w/ 100 sideband channels each), it is not practical to build a network with huge switches. It would be more economical and more practical to build a mesh network and then manipulate light (lambdas) to traverse through the network. The idea is to lower the cost per lambda to the end user. The following figures may not be exactly right, but it's the general trend. The industry is at about $1,000 per lambda right now. Avanex's solutions are at about $500 per lambda. Avanex's aim is to get to sub $100 per lambda within two years. With all these fibers being/going-to-be laid everywhere (long-haul and metro), the race is on to build equipment to mux/demux/add/drop & manage lambdas in an effective and an economical way. (Avanex provides the building blocks for these box makers.) Finally, I am amazed by management's forward revenues guidance for F01 (June) and C01. It is very rare to see guidance like that, even in the networking space. These growth rates are just super fast, and they are especially impressive considering the high absolute figures. Here is a history of management's revenue guidance: 01/00 Management said to look for F01 $95m, C01 $140m 04/00 Management said to look for F01 $108m, C01 $147m 07/00 Management said to look for F01 $133m, C01 $187m 10/00 Management said to look for F01 $190m, C01 $270m That's Big MO. Everybody knows that management must to be conservative when guiding Wall Street right? Given their guidance, I am now hoping for $0.5 billion run-rate revenues by 2H:C01, and $1 billion run-rate by C02. These numbers are huge. I don't know if they will be able to deliver these results, but it is very rare to see these kind of numbers. Finally, on the short-term basis, the stock has been 'acting' very well since the earnings release (e.g. this morning, when all optical stocks are down, AVNX is up). The float is only 14 million shares ($1.7 billion) and most big tech mutual funds do not yet own the stock. Individual investors generally do not know this name either(very little activities on the message boards of Yahoo, SI, BR). Gilder is pumping AVNX (he does have a huge following), but I think his followers may be a bit gun shy right now (because many of his picks have crashed since Jan 00). Disclosure: I am long this stock. I am hoping AVNX is the next SDLI. I am hoping AVNX is the next JNPR. p.s. For those of you who watched CBS's "60-Minutes" over the weekend, you will understand the following statement. p.p.s. Please do your own research. I could change my mind in the next five minutes and go short. This stock is very volatile. This stock is not for Grandma's or Grandpa's portfolio. It could easily go down by 50% if Nasdaq goes down by 15%. I may be the type to 'pump and dump'.