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The David Huber Game

The David Huber Game – Phil Harvey

February 27, 2003

3 Min Read
The David Huber Game

Someone should invent a David Huber Board Game, in honor of Corvis Corp.'s (Nasdaq: CORV) founder and chairman.

Imagine miniature optical switches for game pieces. The player moves by drawing a Game Card. Each card could have directions for moving the game pieces forward. Get to the end of the board and the shareholders win.

But like every bubble-era networking stock on Wall Street – there's a catch! Shuffled in with the Game Cards are Fine Print Cards, the itsy-bitsy detail stuff that makes Huber richer, the shareholders crazy, and takes away points.

Let's play, shall we?

Game Card: Corvis buys undersea transmission equipment vendor Dorsal Networks for about $90 million in stock. The company says the move gives it a leg up in a complementary equipment market and helps diversify its revenues (see Corvis Dorsal Deal: A Huber Spin-In?). Move ahead two spaces.

  • Fine Print Card: Huber and his VC firm, OCG Ventures LLC, owned most of Dorsal, according to SEC filings. As for the undersea transmission market, Corvis has yet to report any significant revenues from that space, though it has spoken encouragingly of its equipment trials with carriers. Move back three spaces.

Game Card: Corvis has always promoted its use of cutting-edge components to build its switches. Move ahead two spaces.

  • Fine Print Card: Over the past two years, Corvis has bought more than $20 million in components and other products from companies that are partially owned by Huber and/or OCG (see A Survey of the Corvis Food Chain). Huber owns about 25 percent of Corvis and about 34 percent of OCG, according to SEC filings. Move back one space.

    Fine Print Card (again!): In 2000 and 2001, Corvis did about $11 million worth of business with one vendor called ACME Grating Ventures, which turned out to be an on-paper corporation owned by Corvis and Huber through another entity (see Corvis Keeps Gratings in the Family). Move back two spaces.

Game Card: Corvis, through a newly formed partnership, announces it is buying Broadwing Inc.'s (NYSE: BRW) broadband assets for $129 million in cash (see Corvis & Broadwing: Together At Last). Move ahead two spaces.

  • Fine Print Card: Broadwing's money-losing broadband network was built using Corvis equipment, the purchase of which was financed, in part, with Corvis shares, according to SEC filings (see Broadwing Reduces Share of Corvis).In addition, Corvis and a venture firm called Cequel III own a majority of C III Communications, the firm that bought Broadwing's network (see Broadwing Sells Broadband Biz). Cequel III's founder and president, Jerald Kent, is chairman of Avix, a project financed by OCG, according to the St. Louis Business Journal. Published reports say Avix is involved in linking a series of cable TV networks via fiber optic cable nationwide using Corvis switches. Move back five spaces.

This David Huber Game is tough to beat. Seems like Huber himself is the only one who is guaranteed to win, no matter what the next move is. And I'll bet many players are wondering if they'll ever reach the end of the board at this rate. If they do, will they think it was worth the trip?

— Phil Harvey, Senior Editor, Light Reading

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