Finisar’s Q408 Earnings Call was June 12. Since then the stock has declined nearly 25%, reflecting what we believe is a general dissatisfaction with revenue growth guidance of 10-15%. This guidance appears conservative.
Just as the market abandoned hope of consolidation it strikes. The dust has settled from the merger announcement between Finisar and Optium and in plain terms it is a brilliant move. Finisar is already a leader in the industry but this puts them in an even stronger position than before. This series of posts looks at why it is happening, who benefits, who loses, and suggests what is likely to happen next.
One of our more popular theme pieces (see “Five Misconceptions About the 10G Optical Market“) examined the state of the 10GbE market and sought to identify the gaps between market perception and reality. It’s time to publish an update with the facts we have collected and opinions we’ve formed since then.
I’ve noticed a common trend during conversations with investors and analysts about the state of the optics market. People seem to be staking their hopes on 10G as the growth driver for the industry. I firmly believe this is true, but people are assuming the gains will be evenly distributed among all players. Here are the common misconceptions:
I know two American engineers who have relocated to China to lead optical module design teams at Chinese equipment companies. They live and work in China for Chinese companies, using their skills to build custom modules – skills no longer in demand from their American Tier-1 telecom equipment employers.