Not participating in the move today: Ciena (CIEN), which reports earnings on Monday before the market opens.
Ciena (CIEN) shares are trading sharply higher on strong results for its fiscal fourth quarter ended October.
FORBES: Ciena Spikes On Strong FY Q4; A Play On Insatiable Bandwidth Demand
The group is trading sharply lower following disappointing guidance this morning from optical networking component provider Ciena (CIEN).
FORBES: Optical Stocks Slide On Ciena's Weak April Quarter Outlook
Historically, CIEN has averaged a post-earnings move of about 8.6%, the data suggests.
Note that Ciena (CIEN), another player in optical networking, recently spiked on strong results for its October quarter, as the company cited strong fundamental demand.
These include Ericsson (ERIC), Alcatel-Lucent (ALU), Nokia Siemens Networks which is a joint venture of Nokia (NOK) and Siemens (SI), Cisco Systems (CSCO), Juniper Networks (JNPR), Ciena (CIEN), and Tellabs (TLAB).
As I noted yesterday, Oclaro (OCLR) after the close on Tuesday issued an earnings warning, news that followed similarly downbeat reports from Ciena (CIEN), Finisar (FNSR) and EXFO (EXFO).
Investors are clearly believers in large part because of the track record of Corvis' founder, David Huber, who also started Ciena (nasdaq: CIEN - news - people), a pioneer in new optical technology now used in nearly every telecommunications network.
Irrational exuberance and irrational pessimism is more pronounced in momentum investing whereby investors chase after popular stocks networking in the late 1990s like JDS Uniphase (NASDAQ:JDSU), Ciena (NASDAQ:CIEN), Cisco Systems (NASDAQ:CSCO), and Lucent-Alcatel (NYSE:ALU) that now trade at a fraction of their 2001 highs.
After almost a decade of fast growth, the leadership of Cisco Systems (NASDAQ: CSCO), Ciena Corp ( CIEN), JDS Uniphase ( JDSU), Corning ( GLW) and Ariba Inc. ( ARBA), and Lucent-Alcatel (NYSE: ALU) became complacent and arrogant with success, setting the stage for the eventual slow-down and downfall to irrelevance.
This means that, unless Netflix finds some magic way to fix its model or being acquired by someone, it is doomed to follow the path to irrelevance, as did Dell Computer (NASDAQ: Dell), Cisco Systems (NASDAQ:CSCO), JDS Uniphase (NASDAQ:JDSU), Ciena Corporation (NASDAQ:CIEN), and Lucent Alcatel (NYSE:ALU) in the last decade.
FORBES: Netflix's Strategy Flip-Flops: Courage or Recklessness?
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