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Technology Stocks : Orckit (ORCT) -- Ignore unavailable to you. Want to Upgrade?

To: Scrapps who wrote (1693)	1/26/1999 5:47:00 PM
From: Daniel Ralls	Read Replies (1) \| Respond to of 1998

Some notes: I did not listen to the conf call but have read some analyst reports about what happened. The Bad: Won't be profitable until 4Q99. This is a real disappointment but it seems to be caused by GTE and DT dragging their feet evaluating the new chipset. Cost reductions at ORCTF are ahead of schedule which resulted in a positive gross margin number. HDSL sales to be flat or decline until second half of 99. Focusing on South America, Eastern Europe and DT. Why only those 3? and what about HDSL2? I thought they were targeting the US for that. Preferred Cap analyst thinks Orckit could have problems (lose some business to another vendor) once GTE is acquired by BEL. I thought the GTE deployment is for Frame Relay, BEL's is over ATM, so does WSTL/ALA support frame relay? Also thinks Orckit might need additional financing. It's possible but I think it is a low probability now but it is something to watch for. The Good: One analyst thinks a new European contract will be announced followed by a new US contract. No time frame was given. The new chipset will be licensed to 3rd parties. I believe mgmt stated that Orckit will recieve higher revs (around $8 per chip) than the $2 per chip other cos recieve (read: AWRE). Fujitsu Computer (7% of world pc market) is a likely customer. Good thing about this revenue is that it goes staight to the bottom line and can offset some of the cash burn they will incur over the next 9 months. Expect LU Europe relationship to show results in 99. Josepthal raised target to $28. I'm disappointed w/ this company. The only thing to look forward to is new contract wins. I'm reluctantly holding because I believe ADSL will be huge but I bought some Westell as a hedge in case they steal some GTE business away from Orckit. ********** CSCO won primary supplier at Sprint. biz.yahoo.com maybe ORCTF will get seconday supplier. 1600 CO's need to be equipped which is big. Did anyone notice the R&D line on AWRE's income statement: $646,094. That is nothing. ORCTF spent $3.989 million. How will AWRE compete w/ ORCTF's new chipset in terms of licensing? ORCTF could go after all those AWRE customers, couldn't they?