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

To: pass pass who wrote (3278)	9/17/1998 10:29:00 PM
From: gbh	Read Replies (1) \| Respond to of 12623

Prove it. The company's lack of mention of a share buyback in the "re-pricing" press release speaks loud and clear. I'm not saying they will not in the future announce a buyback. But as of now, they are effectively printing shares to fund these options. BTW, this is not that unusual. Many good companies fund option programs by simply issuing more shares. But, at this point in time, with CIEN held in such low regard by Wall Street, the correct thing to do is to use some of its cash to avoid putting further pressure on earnings. You also said the earning for next year could be as low as $0.20/share. That's $20M profit. And you said the revenue would likely grow. Current revenue is $500M, so let's say next year revenue is $500.000001M. $20M profit from $500.000001M sales for WDM equipment? Perhaps Ciena is better off selling grocery. The point here, in case you missed it, is to try and establish a fair value for CIEN. Maybe we should just say, gee, CIEN was at 90, 60 days ago, they shouldn't be any lower than 50, or 40, or 30 now. Well let me tell you something, 60 days ago the company wasn't telling us that 4Q will be bad, and '99 will be terrible (comparitively). So forget about that company of 60 days ago, its dead and buried. This is a different company, and the story is not quite so rosy.