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

To: Asymmetric who wrote (3143)	9/15/1998 7:54:00 AM
From: Beltropolis Boy	Read Replies (2) \| Respond to of 12623

wonder how many arbs and floor traders they had to carry off the floor... peter. affirm. and i wonder how many individual investors got chafed trying to play the spread? i stayed on the sidelines, but it sure was enticing; even the tellabs-coherent deal had temptation. as i posted over on TLAB, what a long strange trip it's been... U.S. OPTIONS/Ciena active as merger plans canceled 09/14/98 7:48PM CHICAGO, Sept 14 (Reuters) - Trading in Ciena Corp. and Tellabs Inc. options was brisk Monday after the two telecommunications companies canceled plans for their $4.7 billion merger pact. The news left arbitrageurs in a panic, scrambling to unwind positions as shares in both companies tumbled. "There are arbs who lost four years of profit on that (Ciena/Tellabs) deal. They're are just inside out on this one," a trader said. Implied volatility on the options eased on the belief that the worst is now over, options analysts said.

To: Asymmetric who wrote (3143)	9/15/1998 7:58:00 AM
From: Beltropolis Boy	Respond to of 12623

fibersex? perhaps nettles is a better marketer than you thought... "Anyone who tried to download the Starr report knows there is insatiable demand for in the market today," Ciena's Nettles said. Ciena's Troubled Merger Deal With Tellabs Is Called Off By Mike Mills Washington Post Staff Writer Tuesday, September 15, 1998 washingtonpost.com

To: Asymmetric who wrote (3143)	9/17/1998 8:41:00 AM
From: Asymmetric	Read Replies (1) \| Respond to of 12623

Many Arbs Lost Bets On Merger of Ciena Corp. - Tellabs, Dow Jones Newswires -- September 14, 1998 The aborted merger also exacted a painful toll on the many arbitrage players that had bet heavily on the deal. By one estimate, these investors had positions in 25% of the shares of the two companies. "I think they lost billions of dollars,"said one official at a New York arbitrage firm. "This is easily the most painful arbitrage experience in many years." Though most parties involved with the doomed merger suffered financially, some analysts were at least a little upbeat about the future prospects of Tellabs. News that third-quarter earnings would be flat was somewhat tempered by statements from company officials that Tellabs is still comfortable with end of 1999 earnings-per share estimates of around $2.35. "We don't think their core fundamentals are at risk," said ABN Amro's Leon. He added, however, that the loss of Ciena leaves Tellabs with a hole in the company's long-term strategy of adding new products and a new growth engine. Meanwhile, Tellabs officials indicated Monday that they remain interested in adding a partner that provides optical-networking technology, but mentioned no likely candidates. Far more troubling is Ciena's future. The company revealed Monday that its net income for the third-quarter ending July 31 was $2.1 million, or two cents a diluted share, down from year-ago $35.7 million, or 34 cents a share. These declines in part reflected the fact that Ciena has been forced to slash its prices in an effort to stave off heightened competition, especially from powerhouse Lucent Technologies Inc. (LU). "Technical barriers to entry are proving small," said Nutmeg Securities' Schopick, "And the technology pioneered by Ciena has not proven difficult to immitate." Consequently, Ciena has adjusted its gross margin target model range to 45% to 50% from above 50%, analysts said. In yet another does of bad news, Ciena said during the conference call that Sprint Corp. (FON) indicated it may want to work with two suppliers in the future, not just Ciena. Sprint and WorldCom Inc. (WCOM) account for the vast majority of Ciena's revenue. Ciena's best hope now, some analysts said, lies in finding a new suitor. Although the two companies announced that the merger termination was mutual, Ciena indicated in a press release that it did not believe it could win Tellabs shareholder approval, at least not at a price acceptable to Ciena. The merger had been on shaky grounds since Ciena revealed in August that it would not meet third-quarter expectations. Later that month, news that AT&T would not award a new contract to Ciena - which was announced only moments before shareholders were poised to vote on the merger - led to a postponement of the vote and a renegotiation of the terms of the pact. After Ciena last week revealed that it lost a three-year, $100 million contract with Digital Teleport the future of the merger was again called into question, and some investors interpreted - correctly, it now seems - Tellabs' silence then as an ominous sign. -By Craig Karmin; 201-938-2020 craig.karmin@cor.dowjones.com -Shawn Young contributed to this report