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To: GST who wrote (139635)	2/21/2002 1:50:55 AM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Gst, from one hell of a pissed off Ciena investor. >>Date: 2/19/2002 9:10:50 PM Puddin Head Thou art very persistent. Let’s break down ONI’s most recent quarter (3q) reported by the SEC: ONI has revenues of $40.2mln, and excluding extraordinary charges, had a gross margin of 37.5% or about $15mln in cash. Subtract from that regular charges of $22mln for R&D, $15mln wasted in in sales, and $18mln out the window for overhead. So basically, you have a company whose latest quarterly reported NEGATIVE cash flow, and you are arguing about valuation? Most normal people pay a multiple of EBIT or cash flow or net income for a company. So Ciena basically paid hundreds of thousands of dollars to an investment banker to convince them that $900mln was a fair valuation for a company with $40mln in trailing quarterly sales and negative trailing cash flow. I am sure ONI has great technology and that Ciena is composed of very nice, God fearing people like yourself. But this valuation is just boneheaded. Once this calculation seeps in, most block traders on the street will be shorting CIEN and the stock will drift down, and yes, possibly even destroy the value they paid for ONI. Sorry I had to be the first to let you know.