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

To: Curtis E. Bemis who wrote (4832)	11/1/1998 7:44:00 PM
From: Steve Rubakh	Respond to of 12623

UPDATE) Ciena Investors Again Betting On Rumors Of Takeover, Big Contracts Dow Jones Online News, Friday, October 30, 1998 at 16:33 NEW YORK -(Dow Jones)- Ciena Corp. shares climbed for a second straight session Friday amid persistent takeover rumors and speculation that the telecommunications-equipment maker might have some large contracts in the pipeline. The company hasn't substantiated either rumor. After climbing 26% Thursday, Ciena's (CIEN) Nasdaq-listed shares closed up another $1.75, or 11%, to $17.188 Friday on volume of 26 million. Nearly 31 million shares changed hands Thursday. The stock climbed as high as $17.5625 intraday Friday. Still, the stock at its current level is around 75% below its 52-week high of $92.375, set July 21. William Magill, an analyst with NationsBanc Montgomery Securities Inc., Thursday said Ciena may be rising after a mention of the company in Uniphase Corp.'s (UNPH) first-quarter earnings report, released Wednesday. The company reported that Ciena is once again a 10% customer for Uniphase - implying to investors that Ciena's business may be on the rebound, Magill said. The Uniphase idea "holds some water, but the way this is moving, it seems like there is something else out there," another analyst said. Last week, Ciena's stock soared after the chief executive of its former merger partner, Tellabs Inc. (TLAB), made comments that some say suggested the companies might revive their failed merger. The two telecom-equipment makers called off their once-celebrated merger deal last month after a series of blows to Ciena made the terms untenable. Michael Birck, chief executive and president of Tellabs, recently said Ciena is "a seemingly attractive opportunity," but didn't say whether the companies are talking about trying to rebuild their deal. Birck said one problem with Ciena is the sharp disparity between its depressed stock price and the company's view of its value. But many Ciena followers construed Birck's remarks as an indication that Tellabs still thinks it might like to buy Ciena. Tellabs makes "digital cross-connect" switches that help phone companies and other corporations manage traffic on high-speed data networks. Ciena supplies the big phone companies with equipment that boosts the capacity of fiber-optic networks. The Ciena merger, announced in June, ran into trouble after Ciena lost out on two big contracts and issued a profit warning. The value of the merger, pegged at $6.9 billion when it was unveiled in June, had been nearly halved after the companies reworked the deal and investors continued to unload Ciena stock. Originally, Tellabs was to acquire Ciena in a 1-for-1 stock transaction. The ratio was scaled back to 0.8 share after Ciena warned its third-quarter revenue wouldn't meet analysts' estimates and AT&T Corp. said it wasn't going to grant Ciena a hoped-for contract. Then, Italian rival Pirelli SpA beat out Ciena for a contract from privately held Digital Teleport Inc., sending Ciena's shares into a deeper tailspin. Tellabs and Ciena shareholders originally were supposed to vote on the merger Aug. 21 but Ciena and Tellabs delayed the meetings after AT&T, a half-hour before that vote, phoned Ciena with the bad news.