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

To: craig crawford who wrote (2306)	6/16/1998 7:42:00 AM
From: Dave Dickerson	Respond to of 12623

6/16/98 To all-Some more thoughts. During the recent merger,Mike Birck and the sharp mgt. team had over 25 key analysts in to wine and dine them, and give them info. About the future of this merger,it's synergistic effects and long term growth and net earnings prospects. Now this kind of "smooching" is effective as you see how the investing public handled Tellab's price on 6/15/98 (up1 11/16 or 2.6% to 641/2 on a day that the Dow is down 207) Remember that 70% of Tellab's is owned by mutual funds, whose managers depend very heavily on the judgement calls of a handful of key analysts, who just came back from being "smoched" ( is that a neat word I just made up-)).So what should us little stock holders think? Well I for one will hold my shares for the long term and enjoy the ride. Not all mergers are made in heaven, the recent Northern Telecom(Nortel) move to acquire Bay Networks for 9.1B was not viewed as favorably by the analysts, as Nortel was down 9 7/16 or 15% on 6/15/98. Could have something to do with fact that Bay has been struggling financially, with a -144 m loss in the 3rd ¬. Remember that President Mike Birck owned 11% of Tellab's before this proposed merger, and it's in his best interest not to have much dilution of net earnings per share, after the initial10 months or so of this process. What are my projections as to future net earnings of a Tellab's, assuming that this merger goes through? They are as follows.1998 $1.62 net per share times 42PE (that's about current PE) =target price of $68. 1999,a net of $2.06 per share times 42PE=a target of $86. Year 2000 a net of $2.71 times 42=$113. 2001 a net of $3.58 a share times 42PE=a target price of $150 per share. And 2002 a net of $4.73 per share times 42PE= a price of $198 per share. Now these are my figures, do not make judgements based on them, but rather use them to make your own projections and judgements. An Aggie who is still bullish on TELLAB'S DAVE DICKERSON