To: Sharise Brown who wrote (4919 ) 1/26/1999 4:24:00 PM From: Jay Rommel Read Replies (1) | Respond to
From Briefing: climbed back to the top, although many shareholders incurred much pain in the process. Last June, these two companies agreed to swap stock in a merger of equals at a time when shares of TLAB were trading $65 7/8 and CIEN was at $57 9/16. But by mid-August, the luster began to wear off the deal as CIENA began to warn about upcoming results, which took its toll on Tellabs shares. One month later, the much anticipated merger was called off as Tellabs realized it had embarked down the wrong path with a partner that was not able to deliver the big customer (AT&T) it had envisioned when the wedding was first arranged. Not to mention, Tellabs ran into execution problems of its own, revealing that it too was having problems growing revenues. It seemed that with the Asian turmoil and management being preoccupied with the merger, Tellabs had also lost focus. Much of what transpired last year is now history, however, as despite the problems that Tellabs was facing back in Q3, the company has managed to rectify its market position and allowed its stock to rebound from a low of $38 3/16 on October 8. Since reaching this low point, the stock is up more than 125% in less than four months. Then, of course, so is most of the telecommunications market, with the exclusion of CIENA. If TLAB shareholders would have been on a nine-month vacation without access to TLAB price quotes, they probably could not tell much of a change in the price of the stock. Too bad the same can't be said for CIENA shareholders.
