Barron's Interview with Ciena's CEO Gary Smith:

blogs.barrons.com/te...cycle/

lt cap,

Thanks for posting the Barron's article. I think the CEO just called ma a 'dope'. I'm hoping that means a long-term dope, rather than a short-term one. If it 10 bags, it'll be a $210 stock. It's a bit unnerving how confidently he speaks of their not having problems with just about anything you can name. And while he differentiates INFN's performance, I'm very curious - is he shooting straight, or is he like Fallon - not a con-man, but overly optimistic on current business and prospects. Guess we'll find out in early Sept. They did miss the last two earnings.

In other news, I was looking at the VG sector, and yeah, ATVI and TTWO have crossed 40. Didn't look at EA but I expect the same performance wise. But that is Jester's purview, I really am not informed on current developments. Except for: No Man's Sky. I've just started playing it. Hype and expectations were thru the roof. Last time I looked, Metacritic had it as a 70 score. Yup - it has it's problems and mid-game bordom according to critics. But it has something new - a 'proceduraly generated' galaxy with 18 quintillion planets.  And a lot of things in the game are generated on the fly - inhabitants of planets, topography, etc.  You may or may not ever encounter another human in your journey, althought it is an MMO. Obviously, it needs a lot of the kinks worked out. But I think it may be an important concept/innovation for the industry going forward, and it is the antithesis of games that are 'on a rail' and play the same everytime and for everyone. The game 'holds your hand' for a short while teaching basic concepts, and then you're on your own. Interesting stuff. I think it was Barron's that had an article '10 things I wish I knew when I was starting to play No man's sky'.

As all CEOs go, he not only has a vested interest, but is the chief salesman for his company.  So yes, he is doing a sales job.  However, he is right in that it has taken CIEN all this time to right his ship.  Ciena bought the Nortel Optical segment in early 2009 for close to $900M.  That was a relatively large amount for CIEN. When Ciena bought it, it bit off a lot, probably more than it should have, so it has taken it years to digest it.  And on top of it the optical market stayed in a deep funk for many years, so it was a combination of factors.

That said, these were problems that many outfits experienced, even if those other outfits did not acquire anything, they were tough times for all.

The other truth is that the field of companies competing for sales and territories is much reduced.  The fact remains that bandwidth demand continue to grow, and with the combination of IoT and 4K TVs now being the choice if consumers that demand will continue for several more years. With a vastly reduced number of companies, times will be good for all in just a few years.

BTW, I bought more INFN on Thursday.

I've shorted EA several times in the high $79's and covering for a point or more. It's been in this $75-$80 range for a month now, and aside from the typical CB buying to levitate all markets regardless of deteriorating fundamentals, it's hard to make a case for going higher. Did you read that soon the BOJ will be the top shareholder in over 50 big Japanese companies? Madness, utter madness.

It's interesting, EA said in their most recent earnings that they aren't doing non-GAAP earnings any more. You'd think this would help make parsing the numbers easier, but for the life of me I cannot figure out how analysts report $3.55 non-GAAP guidance for the year ending March. The GAAP guidance is $2.56. Even if we go with the non-GAAP, at the recent highs of $80 that's 22.5x forward numbers, which is much higher than the market average, which itself is very high historically. If we assume the following year is around $4, again using the higher non-GAAP figures, and say the market prices that March 2018 figure in calendar Q2, $80 would still be a slightly high multiple. 

Can any of you explain how to get the $3.55 non-GAAP number please?

investor.ea.com/

ATVI is in the $40-$43 range for the last month, and I'd be interested in shorting it closer to the highs for a trade. or maybe sell puts after a stops hunt if it goes below $40.

My speculative long recently has been VRX. If you believe they'll stay in business, they're dirt cheap. IMO there has been a long basing process in the low $20's, and there's the chance for short covering, and some big sellers have already sold out and likely many other potential sellers have also exited, so it could easily run to $38 (recent highs twice) or even $60 (the low before the March crash). No doubt there are many challenges, such as the debt and the public/Congress pressure on drug pricing, but they're priced in imo and are fodded for "not as bad as expected" narratives later.

So yesterday I recommended VRX, saying the bad stuff is all priced in. Today, up 10% at the open, Morgan Stanley going bullish:

Shares of Valeant Pharmaceuticals International Inc. VRX shot up 9.7% in active premarket trade Wednesday, after Morgan Stanley analyst David Risinger turned bullish on the drug maker, citing the belief that major risks to the company have already been priced into the stock. Risinger raised his rating to overweight, after being at in line since October 2015. He raised his stock price target to $42, which is 58% above Tuesday's closing price of $26.60, from $27. "Risk of severe financial stress should diminish as [debt] covenants are renegotiated and [Valeant] pays down debt, and deleveraging should drive equity value accretion," Risinger wrote in a note to clients. Regarding risks of drug pricing resets, Risinger said Valeant has already experienced step downs in net pricing and access, and he his valuation estimates already account for generic competition for the company's most controversial drugs--Isuprel and Nitropress--over the next six to 12 months. The stock, which was on course to open at a 2 1/2-month high, had plunged 74% year to date through Tuesday.