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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: nghi vu who wrote (2113)	5/9/1998 1:01:00 AM
From: joe	Respond to of 12623

>>well, I think you are wrong to think that it can't get any worse than last time. Meeting earning meant squat in this case. Last quarter CIEN beat estimate by 2 cents but their "guidance" shook the street. The stock has already retraced most of its lost since that day. It was at 55 the night before the debacle to 42.<< I'm not disagreing with this, but IMO we are at least in the semi-worse, because the WorldCom situation and AT&T situation have not been resolved. I think a lot of the market treats this as a high discounting affect. Market is waiting for CIEN to "show them the money". >>Remember, CIEN didn't loose Worldcom. Worldcom just decided to delay buying for the next 2 quarters. A lot of people is assuming that they will start buying again in the fall.<< When the market dropped to 38, it was acting as if there was no WorldCom contract to be had (even though CIEN did not say this). Now, you could be very right about people getting optimistic and assuming that that WorldCom will start using CIEN again. But all the short staircase jumps, up from 38, have been mostly due to successfully acquiring small contracts. So, what we're really debating: is CIEN at 55 because lots of people think WorldCom and AT&T will come to rescue, or because they think that CIEN can still survive without them - that business is going to role in one way or the other - even though possibly/probably at slower pace than before? Hard to say...I'd say market has some of both elements... >>Always assume the worst and hope for the best.<< I guess the real worst is that CIEN does not meet numbers, announces that WorldCom and AT&T have delayed deployment until at least 1999. Then stock drops to 35-40, and we sit on it for 6-12 months to see if things change by then. In the meantime, CIEN just gets bunchs of small trivial contracts that don't allow it to meet revenue expectations. IMO, the reason I don't buy the above, is because CSCO HAS TO get the head start on LU, so they have the desire and resources to make things happen. I don't think CSCO is making a token appearance with CIEN. And if CSCO is indeed serious, they are one hell of a great company to have on your side. That's a lot of what I'm banking on. joe