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Technology Stocks : Corvis Corporation (CORV) -- Ignore unavailable to you. Want to Upgrade?

To: Doug Skrypek who wrote (332)	3/6/2001 3:43:34 PM
From: James Fulop	Read Replies (2) \| Respond to of 2772

>>How can CORV have an inventory problem if they only have three customers? I find it hard to fathom that they would build equipment for speculative sales.<< I am not sure "problem" would be the correct term, but NUFO did mention Corvis' inventory "situation" as the reason for its % of NUFO revenue decreasing from 22.1% in the 3rd quarter to 17.1% in the 4th quarter per their CC in January. I'm just relaying what NUFO said and would post the link to the CC but it no longer seems to be archived on NUFO's site. Regards.

To: Doug Skrypek who wrote (332)	3/6/2001 3:46:07 PM
From: GraceZ	Read Replies (2) \| Respond to of 2772

You have to understand how this kind of equipment is ordered to understand how you can have a back up. Say I'm William's and I estimate that I'll need a given quantity of x,y,z from CORV over say the next 5 quarters. We make an agreement for the price and delivery over time on all of the equipment (say over a two-three year period). As the equipment gets delivered and deployed it then becomes revenue, not before. CORV doesn't deliver it to Williams any faster than William's can use it. All you have to have is a slowdown at William's in order to have a back up at CORV....CORV has a similar agreement with it's suppliers as well, but perhaps they were concerned about shortages of certain components so they took delivery from NUFO in an earlier time period for equipment that didn't necessarily immediately get used. There may even be an agreement with NUFO to take back what isn't used because remember it isn't billed until it is deployed. The way this came about is that they were all operating under conditions where the thing slowing them down was constraints in the supply of components, not a slow down in demand for their products. In business, when the phone is ringing you think it will never stop ringing. Then one day it does. Then you get to the other side to that which is that you think it'll never ring again. Then one day it does. No matter how many times you go through that cycle you never really seem to get to the point where you can accurately predict when that is going to happen. The most you can do is to limit the damages when it does by reacting as quickly as possible to the new situation.