In the past two weeks, the Nasdaq has been in ill-health. Last Friday, the
market plunged 179 points (4.66%). Despite this, the IPO market was
seemingly in another universe – especially the fiber optic issues.
The most incredible was Corvis
. Apparently, the company has the next-generation router, which
will make the existing fiber network better and faster.
Corvis is the mastermind of Dr. David Huber, who is the founder of Ciena and
the holder of 41 patents. He also has 95 million shares of Corvis. Not
bad. In the IPO, the original price range was $13-$15. Then it went to
$28-$30. On Thursday night, the IPO was price at $36, raising $1.1 billion.
The IPO opened at $95 and then ended the day at $84.72. Roughly, the
company has a $28 billion market capitalization.
Still opportunity here? Most likely. The company has incredible backing,
such as from the God of optics, Vinod Khosla. He is the star VC at Kleiner
Perkins and has backed other hot optics companies such as ONI, Cerent and
Corvis also has a significant strategic investor: Cisco.
While the company does not have any revenues, this should change fast.
Corvis’ products are in trials with Broadwing and Williams Communications.
Both will commit $200 million in orders for the next two years. Qwest
is also part of the trials (for a $150 million two-year contract).
Another hot optic company was Avici Systems
. This was a much smaller offering. The company issued
7 million shares at $31 a piece, raising $217 million. On its first day of
trading, the stock opened at $92.06 and closed at $86.75 (the high was
$102). The company has a market capitalization of $4.5 billion.
While Avici has sales, they are still minimal. In the past quarter, the
sales were $504,000. But like Corvis, sales are expected to ramp-up very
Nortel Networks owns 14 percent of Avici. Hmm. After buying Alteon Web
Systems, might Nortel buy Avici?