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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Seth Leyton who wrote (6627)	12/29/1997 6:27:00 PM
From: tyro	Respond to of 42804

All, MRVC derives MORE THAN 35% of its revenues from Europe where the Fibronics acquisition of Fall 1996 (remember?) is now poised to pay its first big dividends. If Q3 revenues looked to have come in slack it was because NOTHING happens in Europe in summer (civilised people go on long holidays) but come Fall, i.e. Q4, we kick in. Two European bourses (Milan and Zurich) today reached all-time highs: the restructuring story in Europe, which includes networking, continues. One other note: the increased number of shares will NOT be earnings dilutive in Q4 because it is matched by the not inconsiderable interest on $70+ million. Expect EPS to come in at the high end of 26-28. My two shekelim. tyro

To: Seth Leyton who wrote (6627)	12/29/1997 8:25:00 PM
From: WBendus	Read Replies (1) \| Respond to of 42804

Seth, I no longer own any MRVC shares. I sold my shares back when MRVC was flirting with $30 on the upside, just before it broke to $38+ a share. I do think that Asia is a bigger problem than it is being led to be but I also do not think that it is an insurmountable problem. The situation in Asia is recieving considerable attention and I think that the situation will clear, much like the Mexican currency and economic situtation cleared. But unfortunately for MRVC and other technology companies, the next few quarters will likely experience trouble as a result of the current situation in that region. Once confidence is regained and the currencies stablize, the situation should improve for US technology companies that were betting heavily on that region. My emphasis would therefore be on a strong summer rally in the techs as the earnings and revenue climate will likely improve by December of '99. The fear for MRVC is that there will be considerably more competition for them by that time in gigbit gear and the emphasis will be stronger on companies that can provide the end-to-end solution. Things to watch for in this industry for the next few quarters will be; slowing revenues from increased impact of Asia, increasing inventories, sliding margins and the most critical thing to watch for I think will be Days Sales in Receivables. Will these Asian customers be able to meet there obligation in the face of all the short term solvency issues they are facing? Right now all the focus seems to be on the banks and governments that are defaulting on loans but will they be forced to default on their payments for networking gear? Wayde.