Summarized by Kent Larsen
LDS CEO's Firm Surprises Analysts, Doubles Price Range Ahead of IPO
WASHINGTON, DC -- LDS Church member David Huber's new firm Corvis
Corp. surprised some Wall Street analysts by doubling the planned
initial public offering price of its offering price to $28 to $30 a
share, from $13 to $15 a share ahead of the offering tomorrow.
Corvis, a designer and manufacturer of fiber-optic switches, is
seeking to raise more than $750 million with the offering amid Wall
Street's current love affair with fiber-optics.
The move was particularly surprising in the wake of a
patent-infringement lawsuite filed by rival Ciena Corp., of
Linthicum, Maryland, which was also founded by Huber and taken
public. While some analysts say that there may be some merit behind
Ciena Corp.'s lawsuit, others observe that the break between Huber
and his former colleagues at Ciena was anything but pleasant,
"There's been some bad blood between Huber and [Ciena chief executive
Patrick H.] Nettles," said Mark Lutkowitz, president of research firm
But analysts say that investors are eager for fiber-optic companies,
regardless of the lawsuit. "The market is just super-hot for this
stuff," said Pat Dorsey, an analyst for Morningstar, Inc., a mutual
fund research firm. "The demand is really there. . . . It's not just
people attaching valuations to vapor."
Corvis, which has yet to record any significant sales, plans to use
the funds raised for development of its optical switching technology,
including expanding its manufacturing operations. But Corvis may have
trouble raising as much as it hoped because of the number of
companies with IPOs this week. A total of 30 companies have IPOs this
week, "This is the most start-studded week I've seen since the first
quarter," said George Nichols, another Morningstar analyst.
Corvis Doubles Price Range For Its IPO
Washington Post pg E01 26Jul00 B4
By Yuki Noguchi: Washington Post Staff Writer