Hi, I'm new to this company and was looking over its long term chart and saw that rather frightening plunge in its stock price in the later months of 1998. Can someone fill me in on what happened there and what's been done to restore investor confidence that it won't (hopefully) happen again?
but basically it's the thing that I've been railing about, in triumph & savage humor, all day long ...
Short version: it was widely expected in "98 that Cien would be selected as a supplier by AT&T. During the spring-summer of "98, CIEN also had agreed in principle to merge with Tellabs (TLAB). The merger was well received, and both stock skyrocketed -- CIEN to the 90s.
The day that the merger was to be voted on, Nettles, our ceo, received a phone call from T to the effect that it would not approve CIEN as a supplier after all. Nettles was obligated to inform TLAB, and the vote was postponed.
Ultimately, the terms of the deal were renegotiated and the deal was called off. Not so coincidentally, LU, a former division of T, was staunchly opposed to the merger. It is widely accepted that T did LU's bidding in blowing up the merger. In fairness, CIEN also had some difficulties with other customers at the time.
What's changed? Very simple. CIEN has dramatically expanded its customer base, making it far less susceptible to the whims of any particular customer.
Do your own research, however. I think CIEN is the technological leader, but it is competing against giants. In the case of Nortel, a formidable giant. In the case of Lucent, a wounded -- and corrupt -- one. Good luck.