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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: a. paisley who wrote (38582)	12/17/2002 3:58:15 AM
From: Johnny Canuck	Respond to of 69925

MRVC guidance is flat to down next Q. >>Outlook >> >>For the fourth quarter 2002, the company expects revenues >>to be within the range of $55 million to $60 million, >>compared to net revenues of $53.1 million for the third >>quarter, excluding FOCI and QOI. >> I have not heard the recent conference call, but they are still burning about 32 mill a Q in operating expenses with about $104 mil in cash. In addition there is still some outstanding debt. Net debt, they have about 60 mil cash. From a product perspective, they just don't have the size to get any traction with the large RBOC's or large companies. The large RBOC's are the only people really buying these days and their cap ex are expected to be down Y-Y by 10 to 15 percent. The CIEN conference call mentioned they were expecting more price breaks from suppliers, so I don't think there is much traction on passive or active optical components. There is no way they will win a large RBOC contract for their networking products. An RBOC would worry about them being around long enough to service their equipment long term. The jury is still out on free space optics their other product line. On the management side, they are just too inexperienced at this point. They messed up the optical component spin off by not getting it done fast enough. As a result they got to buy the company back at pennies on the dollar. They also have a lousy track record at managing street expectations. Management has been a real wild card. The companies stocks price has been blindside more than once by management even when times were good. No analysts cover them right now. You need that to get the price spikes that would really move this stock. Technical they still look pretty good, but they have bumped againts a strong resistance level and have not made it through. Because of the management issues I would pick something else. JDSU is a better trading stocks in the sector. Watch RSTN and JBL earning report for clue of the demand for the sectors this week.