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

To: JFTRADERS who wrote (5220)	11/4/1998 1:10:00 AM
From: bh	Read Replies (1) \| Respond to of 12623

Taken from yahoo.... BaltimoreFundMgr (45/M) Nov 3 1998 1:26PM EST With all types of stories swirling about the company, I thought I would spend a minute updating this group on our insights gleaned from having spent several days with senior and operating management of CIEN last week. 1. Takeover rumors are off base (but premature). The company is neither engaged in acquisition negotiations nor does it intend to do so for some time. The issues are a) value (they do not believe they will achieve an acceptable sale price with their stock at still depressed levels), b)their priority is to focus on rapid growth, and not to be distracted by deal talks, and c)from an accounting perspective, a pooling of interest is precluded until March due to the recent stock option re-pricing. 2. Recent reported sales by 2 insiders is meaningless. The sales are completely normal and are consistent with their pattern of disposing a small portion of their holdings whenever legally permitted. That window is a short one that opens briefly after earnings are released, but was shut during the TLAB developments. 3. MCI Worldcom prospects improving. They have received indications from WCOM, now that the MCI_Worldcom merger has consolidated, that it will over-build some of its DWDM routes with product from Nortel and CIEN. 4. Sprint looking up, too. A decision by Sprint on a second source vendor will be delayed until next year. CIEN remains their favored vendor. 5. Backlog is up substantially. In an unusual development for the company, CIEN has built the largest backlog in its history, exceeding its highest levels by a factor of 7. In addition, they have received an extraordinary number of RFQ's (Request For Proposal), auguring well for further near-term win possibilities. 6. RBOC's are (finally) coming on. We firmly believe BellSouth recently finalized its inter-office DWDM MAN deployment plans to include CIEN. We also have indications that SBC (formerly SouthWest Bell) is seriously considering CIEN in a similar interoffice buildout. Although an SBC decision is not imminent, BellSouth appears on the verge of consenting to releasing their name. Bell Atlantic is further behind, but admitted in an analyst meeting just last week that CIEN's products have tested "extraordinarily well". -See Part 2--

To: JFTRADERS who wrote (5220)	11/4/1998 1:15:00 AM
From: bh	Read Replies (2) \| Respond to of 12623

Part 2 Of What We Learned From Visiting CIEN BaltimoreFundMgr (45/M) Nov 3 1998 1:28PM EST Our Take-- Ignore the takeover talks and focus on the fundamentals. The picture that clearly emerges when spending time with the company is that CIEN enjoys considerable competitive advantages in a fast growing market, while its equity continues (even with this run-up)to trade well below historical and peer group norms. The competitive advantages are not inconsequential--CIEN has superior R&D and manufacturing expertise, having beaten its customers to market in 5 different DWDM systems. For a start-up to surpass a well-heeled competitor to market just once is a notable achievement--to do it 5 times suggests superior R&D, possibly of world-class level. Yes, it is true that more competitors are announcing 40 or more channel systems; but CIEN still has the only 40 channel system that is actually being deployed in the field by a service provider. This puts to rest, to all but those in denial, the fear that CIEN is losing its technical edge. In our opinion, the possibility is quite high that many of the competitors will not live up to their press releases in an acceptable time frame. The only accurate measure of technology lead is product deployment and its timing--and on both scores, CIEN maintains an enormous lead. Also note that CIEN appears first to market together with Cambrian Systems (a Newbridge Network unit), a ring-based product optimized for the Metro area networking market. Excepting Ericsson, no established vendor appears close to addressing this enormous market. We were also made privy to 3 new products scheduled to ship in '99. I will not go into detail; suffice it to say at least one of these will gain a great deal of attention when unveiled. As an indicator of the company's renewed confidence, you should be aware they have resumed expanding their sales and marketing organizations, and have, to our eyes, a very enthusiastic and rejuvenated employee base. Final thought on valuation--when you deduct $2/share cash, CIEN's technology is valued at $2b. Compare that to LU paying $1b for Yurie Systems (which has a fraction of CIEN's revenues) or Alcatel paying $350m for Packet Engines (a start up with no revenue), or to several private DWDM start-up ventures receiving private market valuations in the hundred's of millions--despite having no revenue and an unproven technology. In that context, CIEN's current valuation is not lofty. As CIEN announces new products and customer wins, expect the market to take notice and likely continue to revalue the equity at increasingly higher levels. Sorry for the lengthy post. I will now go underground and do not intend to resurface unless there is a major development (assuming these long posts are welcome). Good Luck All! View Replies to this Message CIEN: Quote \| Profile \| Research \| Insider This Is a Reply to: Msg 22149 by BaltimoreFundMgr