Tech Outlook: Light Shines Ever Brighter on Optical Networkers
| Outlook by sector: |
Big Numbers
Take the widely discussed, now-scuttled talks between optical players Corning (GLW) and Nortel (NT), which if completed would have been the largest tech merger ever. The deal was all about lasers and laser parts -- the origin of light in the network, if you will. Likewise, JDS Uniphase (JDSU) put together a $40 billion deal with rival laser maker SDL (SDLI), just days after closing a $15 billion merger with E-Tek.| The Few, the Proud Some optical networking equipment plays. | ||
| Company | Recent price | Market cap (billions) |
| JDS Uniphase (JDSU:Nasdaq) | 119 7/8 | $93.75 |
| Corning (GLW:NYSE) | 286 1/2 | 79.62 |
| SDL (SDLI:Nasdaq) | 361 3/4 | 31.3 |
| Corvis (CORV:Nasdaq) | 95 11/16 | 31.86 |
| ONI (ONIS:Nasdaq) | 105 1/8 | 13 |
| Source: First Call/Thomson Financial. | ||
Risk and Rewards
Chasing the bandwidth buildout has been hugely lucrative, rewarding investors richly. These soaring stock valuations have helped companies acquire others. And investors have shown they are more than willing to continue in this direction as witnessed by the IPOs of Corvis (CORV) and ONI Systems (ONIS), to name two. But you have to wonder what will happen when investors stop pouring the money in, and new networks can't get funded, and new equipment can't be purchased and demand for optical parts dries up. For now, though, those sentiments seem silly, when there is so much more Internet to build.- Loading Comments...
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