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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Junkyardawg who wrote (28801)	4/18/1999 2:33:00 AM
From: kathyh	Respond to of 90042

you're right dawg, best not to get too excited... i think i'll edit a bit of that excitement out right now... do you know anything about cien?? they almost bought cien last year for 7 billion... is it a fore competitor?? From ceo's letter, tellabs annual report 1998... So much for the financial aspects of the year -- let's take a look at a couple of the more interesting events of 1998. Number one in that category is surely the aborted acquisition of CIENA Corporation and its portfolio of dense wavelength-division-multiplexer products. After some pretty intense discussions with the CIENA folks last spring, we announced a merger of the two companies on June 3. Given the importance of optical networking to the telecommunications industry now, our own development activities in the area, and CIENA's strong technology and market position at the time, this seemed like a prudent and timely thing to do. Investors appeared to think so too, despite the rather steep $7-billion price tag. Unfortunately, the market for these products took some unusual turns during the summer as several big players decided to buy in, and CIENA's market position turned decidedly for the worse. Hoping to avoid burdening the reader with the many twists and turns of this saga (some of which will likely turn up in MBA case studies in the future), suffice to say that we and CIENA mutually agreed to terminate the merger in early September -- just in time for a major "market correction." The result of all this was an agonizing fall in our market capitalization from more than $17 billion late in July to about $6.5 billion in early October. Thankfully, we have now recovered nearly all the lost ground -- and candidly, that market cap in late July may have been a bit robust at the time, even for a company like Tellabs.