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Financial

Corvis Execs Get Bullish

Corvis Corp. (Nasdaq: CORV) executives are putting their money where their mouths are. Last Friday, CEO David Huber and three other top Corvis officers bought shares of the company on the open market.

Huber himself bought 265,000 shares of stock, and the three others bought 25,000 shares apiece. Experts who follow insider trading are optimistic.

"It’s good that we are seeing a number of insiders buying stock,” says Lon Gerber, director of research at Thomson Financial/Lancer Analytics. "And it’s not just one; it’s a group of them, and that’s a good sign."

But when the amount of stock bought is compared to the amount of stock these executives had sold throughout the year, it becomes clear that these executives are not exactly betting the farm on Corvis.

“Specifically, for David Huber this amount is pretty minimal, compared to the disposition he owns,” says Gerber. On September 28, Huber spent $1.50 per share or a total of $397,000 for 265,000 shares. To the average investor, this is a rather sizable hunk of change. But Huber and trusts in his name own roughly 87 million shares in the company (see Corvis Corrects Huber Holdings). And he has already profited massively since the IPO. The trusts associated with Huber have sold more than 6 million shares, $94 million worth of stock, since the lockup period on the shares expired in January (see Eyes on Corvis Lockup Expiration).

The company’s stock has plunged from a high of $108 to about $1.70 a share today (see Avici and Corvis Make Stunning Debuts), giving the company a valuation ($610 million) that is less than the amount of cash it held as of last quarter ($770 million). Over the last nine months, investors have been spooked by capital spending cuts undertaken by Corvis’s largest potential customers, as well as mounting losses and insiders selling shares.

The company, which had been through seven rounds of funding and two acquisitions before it went public last July, attributes this volume of insider trading to investors who were looking to cash out after the IPO.

"What I think this shows is that the executives of the company see the long-term prospects of the company,” says Andy Backman, director of investor relations for Corvis.

Each of the other three executives who bought stock on September 28 have also made huge profits from stock sales throughout the year. Anne Stuart, Corvis’s chief financial officer, sold 215,000 shares, bringing in gross proceeds of $2.8 million. Terence Unter, chief operating officer, has sold 260,000 shares, amounting to gross proceeds of $2.6 million. And Kim Larsen, vice president and general counsel for Corvis, took in $1.5 million from the sale of 89,600 shares.

Backman says none of these executives had direct input as to when or how many of these shares would be sold. In the case of David Huber, almost all of the 6 million shares were sold through a trust or limited partnership that he had established. The Columbia Trust, set up for Huber’s family, is managed by independent managers, according to Backman.

As for the other executives, Backman says they were on a structured stock-sale program that would automatically sell options according to a schedule. The plan officially ended in July after the company’s last earnings call.

Meanwhile, Corvis seems to be getting closer to generating revenue from a contract it supposedly signed last quarter with France Telecom SA (see Corvis's French Connection and Corvis's Future Brightens). While the company has not officially announced the contract, this morning Corvis announced that France Telecom has agreed to field test its CorWave LR along an 800 km terrestrial link (see Corvis Gets French Trial). The CorWave LR provides point-to-point transport over distances up to 2000 kilometers with up to 3.2 Tbit/s capacity, says the company.

The field trials are expected to begin by the end of the year. Even though discussions of a purchase agreement are still under wraps, the fact that France Telecom is announcing trials gives investors some hope that Corvis will be able to add at least one more revenue generating customer in the next few quarters.

Corvis's stock was trading at $1.70, up 0.18 (11.84%), in early trading. The company will report its third-quarter earnings on October 22.

- Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com

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seabizkit 12/4/2012 | 7:46:27 PM
re: Corvis Execs Get Bullish What ever happen to Sowilo? Heard that it was seeded with IP from Tycom, a suit not a suitor. One a Huber huberish's??
_____ 12/4/2012 | 7:46:25 PM
re: Corvis Execs Get Bullish If you could buy 80 million shares at pennies a piece, ride the bubble until they hit a few dollars and then sell, only to use the proceeds to buy back when the bubble burst and the shares were in the crapper, wouldn't you? The big question is, why the heck was he selling the shares in the first place?

And to really kick the employee's in the butt, he can now buy the shares for a lower price than what most current employee's have for a strike price on the options they were issued just prior to IPO and certainly post IPO.

Wonder if he owned any airline stock?
tradewindx 12/4/2012 | 7:46:24 PM
re: Corvis Execs Get Bullish This is from a source that gives the top ten optical list. Wonder what rag you are writing for. Kind of like the rag that gave us the top ten optical stocks du jour and one is not even optical. Save those optical oracle pennies and start writing about the industry and not the stocks. Sold millions upon millions of share? When did this topic come up when you came up with this list? Oh maybe those who pay your salaries are dumping on the public huh? Now you are "soul searching." Maybe once you guys understand how Wall Street works, you might be able to find their soul along with yours. Let's keep on the topic of optical technology and not the stocks. Those of us who know how to look at a balance sheet and income statement can determine when to buy for ourselves.

COMPANY PRICE 8/8/01
1.Corning Inc. (NYSE: GLW)
$15.85 -> $7.86
2.Digital Lightwave Inc. (Nasdaq: DIGL)
$17.30 -> $5.68
3. Juniper Networks Inc. (Nasdaq: JNPR)
$23.47 -> $13.70
4. Sonus Networks Inc. (Nasdaq: SONS)
$22.00 -> $3.36
5. EXFO (Nasdaq: EXFO)
$14.20 -> $10.05
6. Ciena (Nasdaq: CIEN)
$30.88 -> $11.96
7. Riverstone Networks (Nasdaq: RSTN)
$14.84 -> $6.18
8. ONI Systems Inc. (Nasdaq: ONIS)
$21.65 -> $6.28
9. Extreme Networks (Nasdaq: EXTR)
$27.30 -> $8.54
10. Qwest (NYSE: Q)
$24.20 -> $16.65
LightBeating 12/4/2012 | 7:46:23 PM
re: Corvis Execs Get Bullish Dear _______ (is that a name?)

Your post is not really fair. David Huber started Corvis with a lot of his own money, which he had earned by making Ciena a success. He did not "buy" those shares: he created them! Without him Corvis would simply not exist. He did not sell any shares personnally, but rather through a trust in which he has no say. The least you could do is give him some credit. If he has become rich with Ciena and Corvis, it is through his vision, his hard work, and his intelligence.

Now he his sending a signal to investors, along with the other high level executives, who, by the way, may have made some money so far with Corvis, but were not rich people to start with. They also deserve the money they have made. They are also willing to show their confidence in the company by putting some of that money back into it. But please give them a break: if they have made a couple of $M, why would they not enjoy it too. From what I know (and I know quite a bit), those people, and most people at Corvis, have worked like hell for the past four years to get this company off the ground. And they're still there, day in and day out. They have not left like John Roth left Nortel, making big bucks while times were good, and leaving the company in a mess.

LB
Scott Raynovich 12/4/2012 | 7:46:22 PM
re: Corvis Execs Get Bullish tradewindx: Glad to see you can count. Still waiting for your top ten list.
Scott Raynovich 12/4/2012 | 7:46:21 PM
re: Corvis Execs Get Bullish Actually, never mind, Jeff, I find your old picks:

http://staging.lightreading.co...

The performance of your stocks is below. So far, they performed marginally better than our list. I.E. They didn't go down quite as much. But they are all down. As we are only 2 months into the contest we may as well continue tracking this. My opinion is that our stocks will have more upside power in an up market.

-------------------------

>If I were to start an optical list based on >value and risk mitigation, it would include the >following:

8/8 Now

1. New Focus (NUFO) 5.125 > 3.500
2. JDS Uniphase (JDSU) 9.53 > 7.02
3. Corvis (CORV) 3.28 > 1.79
4. Avanex (AVNX) 7.86 > 3.31
5. Avici Systems (AVCI) 4.42 > 1.80
6. Coherent (COHR) 35.03 > 28.77
7. Corning (GLW) 15.84 > 7.7
8. Applied Micro Circuits (AMCC) 16.59 > 7.98
flanker 12/4/2012 | 7:46:20 PM
re: Corvis Execs Get Bullish Whether CORV will be acquired or is just celebrating anticipated customer wins - that is the question.
tradewindx 12/4/2012 | 7:46:18 PM
re: Corvis Execs Get Bullish Yeah not much better at all...

Light Reading "New" Top 10 List

Initial Investment: $10,000 (08/01/2001)
Current NAV: $4,285
Current Rtn: -57.15%
Total Units: 502

Position Shrs
1. GLW 63
2. DIGL 58
3. JNPR 43
4. SONS 45
5. EXFO 70
6. CIEN 32
7. RSTN 67
8. ONIS 46
9. EXTR 37
10. Q 41

Tradewind's Top Eight List (Cause I can't count)

Initial Investment ($10,000)
Current NAV: $5,709
Current Rtn: -42.9%
Total Units: 1310 shares

Position Shrs
1. NUFO 244
2. JDSU 131
3. CORV 380
4. AVNX 159
5. AVCI 282
6. COHR 35
7. GLW 79
8. AMCC 75
tradewindx 12/4/2012 | 7:46:18 PM
re: Corvis Execs Get Bullish Scott,

Do some more soul searching and maybe you too will get the big picture.

Jeff
tradewindx 12/4/2012 | 7:46:17 PM
re: Corvis Execs Get Bullish Scott,

A big part of journalism is being able to accept criticism. Be thankful that people are even reading. Everyone has an opinion and only time will prove who is right. However, as an optical networking site, you should focus more on the technology rather than questioning individual stock performance. As an observer, I reserve the right to voice an opinion without a rebuttal unless in fact your reporting is unbiased. Be thankful there are people who are here reading because work is tough to find these days.

Jeff
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