Old World, New Economy: Europe Worries Pound Ciena

If Ciena (CIEN Quote) is any gauge, Europe is shaping up as another CLEC-type telecommunications disaster.

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And if it can happen to Ciena, a company with solid management, no controversial vendor financing deals and a profitable product line, observers say there's no reason to believe bigger, more aggressive equipment suppliers such as Nortel (NT Quote) will escape unscathed.

Ciena has lost 28% of its value over two days as investors have grown alarmed by the near-death status of one of its bigger European customers, Global TeleSystems (GTS Quote). GTS represented at least 10% of Ciena's business last year, Ciena has said, and some analysts have estimated Ciena would garner 2001 revenue from GTS in the $60 million range. GTS shares traded Wednesday at $1.31, reflecting investors' doubts about its financial well-being. ...