Officers get big gains in Ciena deal Stockholdings' value soars by millions with sale to Tellabs

'It's nice. We are happy.'

Acquisitions

June 04, 1998|By Bill Atkinson | Bill Atkinson,SUN STAFF

In less than 48 hours, Patrick H. Nettles, president and chief executive of high-flying Ciena Corp., watched the value of his stock in the company soar a cool $40.7 million.

He isn't the only one at the Linthicum-based Ciena who is worth millions more today in the wake of the company's sale yesterday to Tellabs Inc., a Lisle, Ill.-based telecommunications equipment maker.

The value of the stock held by Ciena's 14 directors and officers has jumped 20 percent to $664.5 million, up $111.7 million since Monday's close.

The huge paper gains haven't gone without notice on Wall Street.

"Great job. He [Nettles] deserves it," said Kenneth M. Leon, an analyst in New York at ABN Amro Inc. "He made shareholders happy and he deserves it."

Other Ciena followers agreed.

"I kind of look at that and say, 'So what?' " said Kevin C. Slocum, an analyst at Stamford, Conn.-based SoundView Financial Group. "I also look at the remarkable track record of this company going from nothing to a company that next year was projecting nearly $1 billion in revenue. Isn't that a rather phenomenal accomplishment that warrants recognition?"

Nettles holds 3.927 million shares of Ciena stock, or 3.90 percent of the company, according to its February proxy statement. They now are worth $242.5 million.Other Ciena executives and directors have large stakes, too, and saw their net worth skyrocket.

Lawrence P. Huang, senior vice president of sales and marketing, holds shares now worth $65.5 million on paper, up from $54.5 million Monday. Shares held by Steven W. Chaddick, senior vice president of products and technologies, are worth $65.5 million, up from $54.5 million. And Joseph R. Chinnici, chief financial officer, holds shares worth $16.8 million, up from $13.96 million.

As of Oct.31, Nettles held options for 875,000 shares; Huang held options for 652,500; Chaddick, 821,250; and Chinnici, 270,750.

"It's nice," said Denny Bilter, a spokesman for Ciena. "We are happy."

Ciena has been one of the darlings of Wall Street and the telecommunications industry since it went public 16 months ago. It makes equipment that helps large companies like Sprint Corp. and WorldCom Inc. carry more communications traffic through channels of fiber-optic light.

Yesterday, its shares rose $4.187 and closed at $61.75, while shares of Tellabs fell $2.062 to $63.812.

Ciena went public at $23 a share on Feb. 7 last year and, by the end of its first day as a publicly traded company, the stock had shot up 60 percent.

Ciena's shares continued to climb as the company performed well. They screamed to a high of $62 a share Oct. 22, but began to slip this year in the face of stiffening competition.

Shares, however, surged Tuesday, climbing 12 percent to $57.562, on volume of 5.7 million shares, nearly twice its average daily volume.

The surge in volume came before the $6.9 billion transaction was announced yesterday.

Ciena's stock trades on the Nasdaq stock market, and such volume the day before an announcement could trigger an investigation by Nasdaq officials.

"Our stock watch department automatically looks at any irregularities in stock trading," said Reid A. Walker, a Nasdaq spokesman in Washington, who declined to comment specifically on Ciena. "Every stock has a profile."

John Heine, a spokesman for the Securities and Exchange Commission, declined to comment on the run-up in trading at Ciena.

Analysts said Ciena sold at the right time and shareholders have done well. "We think it is a good price," Leon said. "We were very favorable to what Ciena was doing. They certainly are folding into a strong company."

James S. Schmitt, a Ciena investor and an analyst at Westcountry Financial in Somis, Calif., said he could not see the company's stock ever rising to $100 a share.

"As far as combinations go, this is probably the best one they could have done," Schmitt said. "As a shareholder, I am happy with it because we are getting a very good return."

Schmitt said he bought the stock in the $35 range months ago. "We are a satisfied shareholder."

Top five Ciena stockholders:

Patrick H. Nettles, president and chief executive

total shares owned: 3,927,135

share value monday: $201.8 million

share value wednesday: $242.5 million

Lawrence P. Huang, senior vice president, sales and marketing

total shares owned: 1,061,250

share value monday: $54.5 million

share value wednesday: $65.5 million

Steve W. Chaddick, senior vice president, products and technologies

total shares owned: 1,060;250

share value monday: $54.5 million

share value wednesday: $65.5 million

Clifford H. Higgerson, director,

total shares owned: 281,658

share value monday: $14.5 million

share value wednesday: $17.4 million

Joseph R. Chinnici, chief financial officer

total shares owned: 271,750

share value monday: $13.96 million

share value wednesday: $16.8 million

Pub Date: 6/04/98

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