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To: bob zagorin who wrote (39256)	1/23/2008 11:45:48 AM
From: bob zagorin	Read Replies (1) \| Respond to of 57684

listened to the cien conf. call on the acquisition and the ceo was repeatedly ripped by the analysts who wanted more info on wwp with some even accusing cien of doing this deal specifically to get the at&t deal. i think the analysts are under a lot of pressure at all these firms as their recommendations are exploding in their face...here's the DJ story "...=DJ Ciena Shares Fall; WWP Deal Seen Expensive,Timing Questioned By Steven Russolillo Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Shares of Ciena Corp. (CIEN) fell 14% Wednesday after the telecommunications equipment maker agreed to buy a privately held carrier of Ethernet services, a deal that has seen mixed reactions among Wall Street analysts. The Linthicum, Md., company agreed to buy World Wide Packets for about $200 million in cash and 3.4 million shares, or about $90 million, or Ciena stock. Ciena said it will assume up to $15 million in World Wide Packets' debt. The deal is expected to close in the second fiscal quarter of 2008. Ciena also announced it has been awarded a multi-year contract with ATT Inc. (T) to supply the global carrier with these platforms. Jefferies Co. analyst George Notter said he was confused by the timing of the deal, considering a portion of the deal was done with equity and Ciena's share price hovers near a 52-week low. Ciena shares have plunged from $49.55 on Oct. 29 to Wednesday's 52-week low of $22.37. "While the ATT/WWP contract win may have motivated the timing, it might also suggest that Ciena management isn't particularly bullish about the outlook for the business," Notter wrote in a note to clients. He cut Ciena's price target to $26 from $35. Cowen Co. analyst John Anthony said Ciena paid "quite a steep premium," for the company, considering World Wide Packets had sales of about $30 million in 2007. World Wide Packets' profitability was not disclosed. "We believe that Ciena made this acquisition in order to thwart Cisco Systems' (CSCO) attempts to encroach on Ciena's territory and provide it with a competitive advantage over Alcatel-Lucent (ALU) and Tellabs Inc. (TLAB)," Anthony wrote in a note to clients. Morgan Keegan analyst Simon M. Leapold said the deal is expensive considering the acquisition is nearly 10 times World Wide Packets' trailing sales. Even if sales doubled in 2008, the deal would still be viewed as pricey. "We continue to see Ciena as well-positioned and representing an attractive thematic investment, yet acknowledge that with increased risk, the view requires a reassessment," Leapold wrote in a note to clients. Lehman Brothers analyst Marcus Kupferschmidt maintained his overweight rating on Ciena, said the World Wide Packets' technology "looks good and helps Ciena extends its current advantage in the Ethernet-market." In addition, Standard Poor's Rating Services said the acquisition would not affect its corporate credit rating on Ciena. SP said Ciena's pro forma cash balances of approximately $1 billion provides it with ample liquidity to manage its operations following the acquisition. Shares of Ciena were recently down $3.66 at $22.51 on composite volume of 2.5 million shares, compared with average daily volume of 3.3 million..."