I am very encouraged by the latest rumors. I was a long time holder of Ciena before the aborted buyout by Tellabs and the similarities are striking. Here are some reasons for my excitement:
1. Ciena rumors had been floating around for a while, but it wasn't until specific rumors about the share swap ratio began to surface that the deal was actually announced.
2. Ciena shares moved sharply on the Friday before the announcement on more than double the normal volume which was wierd at the time due to the fact that many traders usually close out long positions of volitile stocks over the weekend. (The deal was announced the following Monday.
3. AFC shares moved sharply in December and then retreated. It could have been due to traders seeing the the first signs that this deal might actually happen.
4. Sorensen estimated that the OEM deal would be announced by the end of January. Since all the analysts seemed to know about it, it doesn't make sense that AFC is holding back unless the reason is something bigger.
5. The analysts seemed to raise their targets in unison, again back in December when CSCO shares were trading around $100 ($100*.60= $60). Maybe CSCO's initial bid was 0.6 shares?
6. You wouldn't expect to see a drop in CSCO's share price due to arbitrage trading given CSCO's $400+ B market cap, even at $7B, this deal is a blip for CSCO.
Bottom line, if rumors are correct we should know before the bell on Monday.