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

To: Paul Shread who wrote (2739)	9/9/1998 11:59:00 AM
From: pass pass	Respond to of 12623

CIENA CORP (CIEN) 23 1/8 -5 5/32. What started off as rumors drifting through the market have now been confirmed: CIENA's technology has once again been passed over. According to CNBC, the company has lost the bidding on a contract with Digital Teleport worth approximately $100 million. News has knocked CIEN shares an additional 18% lower, on volume of 8.9 million (compared to avg. daily turnover of 3.7 mln). While investors/speculators are clearly wagering that this is the straw that will finally break the back of the proposed Tellabs/CIENA merger, Tellabs (TLAB 45 5/16 +1 7/8) CEO is downplaying CIENA's latest failure and is reaffirming the company's intention to proceed with the acquisition of the company. Based on the revised terms of the deal, Ciena shareholders to receive 0.80 Tellabs shares for each of their own (vs 1-for-1 stock swap Tellabs originally proposed in June). Assuming that the merger were to go through (and that investors didn't dump TLAB shares on news of finalization-- which is very unlikely), the deal would be worth $36.25 per share to Ciena shareholders. Since the proposed Ciena/Tellabs merger was announced in June, CIENA has issued both an earnings warning and released news that AT&T would not pursue further evaluation of CIENA's dense wavelength division multiplexing (DWDM) systems. According to CIENA, it had expected less than $50 million in 1999 revenues from any potential AT&T contract. CIEN shares have tumbled 60% since the proposed merger was first announced, and have contributed to a 28% decline in TLAB shares, from $65.875.

To: Paul Shread who wrote (2739)	9/9/1998 12:02:00 PM
From: Larry J.	Respond to of 12623

Just spoke w IR @ CIEN. Basically confirmed that Bloomberg released news that a $240 M contract was awarded to Pirellis (sp?) of which $100 million was represented by DWDM product. The balance was the fibre optic cable itself. She did indicate that CIEN is still working w Digital and that the Pirelli award represented 80% (of the available contract) and does not preclude CIEN from participating in future awards, and that they are in fact still involved in 40 channel product qualification w Digital. Also was unaware of any discussions of TLAB walking as a result (like she'd tell me!). I asked if CIEN was preparing any press release, and she did not anticipate it, but did confirm that earnings are due out this week but could not state the exact day. Speculated that a statement may be made at the time. Larry

To: Paul Shread who wrote (2739)	9/9/1998 12:02:00 PM
From: william liao	Read Replies (1) \| Respond to of 12623

if you waited for a few months, you could have sold for over 90, doubled your gain! one of my investment priciples is you never look back. now is cien fundamentally altered since your ipo purchase? per their april 98 figures, the revenue jumpted over 70% to 288m; it has $2 cash plus per share; current ratio was 5 plus; debt/equity is zero. their dense wavelength division multi. systems are very popular. the only concern i had was its customer bases were too narrow; more than 80% of its revenue was generated from the sales to sprint and worldcom. that really makes me nervous. william

To: Paul Shread who wrote (2739)	9/9/1998 12:03:00 PM
From: Doughboy	Read Replies (1) \| Respond to of 12623

I'm getting a pounding headache from CIEN. Whatever could go wrong has gone wrong the last few weeks. At this point, I'm going to hang in there. I think TLAB's Birck is between a rock and a hard place; he basically promised that the deal would be sealed on Nov. 9 with no changes. His word has been golden among analysts and investors, and he doesn't want to lose credibility yet again. Losing the contract is probably not a material adverse event to justify breaking off. I think he has to stick to it, and if he wants to crater the deal, he has to hope that shareholders will do the dirty deed for him. Doughboy.