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Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: John Carragher who wrote (3592)	9/9/1998 8:10:00 PM
From: Linda Pearson	Read Replies (1) \| Respond to of 7342

The Motley Fool's Market Movers (Goats) The Motley Fool - September 09, 1998 17:51 2nd paragraph newsalert.com Linda

To: John Carragher who wrote (3592)	9/10/1998 3:03:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 7342

John, you would be surprised at the number of deals that get done on the golf course or in a bar without the numbers guys participating. Since I'm basically a numbers guy, I don't understand why CEOs routinely do this. From a quantitative perspective, a deal with CIEN makes sense if and only if the following issues are taken into account: 1. The present value of the expected cash flows from CIEN as a stand alone company. 2. The incremental value of the merger over time. That is, what synergies may be expected both through cost savings by the elimination of duplicate functions and the opportunity for mutually beneficial cross selling or using current channels of one participant to sell the products of the other participant. It really comes down to an assessment of cash flows. Clearly, the market has drastically reduced its assessment of Ciena as a stand alone company. So while synergies may still exist the valuation base is necessarily lower. And that brings me full circle to the question I keep asking: what is the value of Ciena's technology? Put another way, what would it cost TLAB in both time and money to duplicate that technology? This is the old buy or build analysis. TTFN, CTC