Optical/IP Networks

Corvis Spikes on DISA Talk

Today the market bubbled with speculation about which public networking companies will get a piece of the large networking shopping spree by the U.S. federal government's Defense Information Systems Agency. At the heart of the project is a request for proposal (RFP) for a project known as Global Information Grid Bandwidth Expansion (GIG-BE).

Last Friday, the long-awaited RFP from DISA went public (see DISA Deal D-Day Approaches). Today, the stock boards built into a frenzy .

Single-digit midget Corvis Corp. (Nasdaq: CORV) rocketed up 23 percent, closing up $0.27 to $1.45, on talk that it had won a substantial piece of the DISA RFP. Cisco Systems Inc. (Nasdaq: CSCO), also the topic of DISA rumors, rose $0.34 (2.09%) to $16.62.

Much of the speculation took place here on the Light Reading message boards, where Corvis fans fired off victorious messages about how they'd already won the deal.

As speculators were busy snapping up shares, however, some anti-speculators made some telling points: The RFP has just been opened up to the public, and therefore, in theory, the field is still open.

In addition to Corvis and Cisco, hopefuls for the DISA deal include Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Ciena Corp. (Nasdaq: CIEN), Juniper Networks Inc. (Nasdaq: JNPR), Lucent Technologies Inc. (NYSE: LU), Nortel Networks Corp. (NYSE/Toronto: NT), Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA), and Sycamore Networks Inc. (Nasdaq: SCMR).

At any rate, the speculation does appear to be premature. Government contracts often involve a long and complicated process, and the bidding process will be rigorous because of the nature of publicly funded government work.

Many analysts have yet to see a clear winner. Merrill Lynch & Co. Inc. analysts Tal Liani and Simon Leopold on Tuesday issued a research note on the DISA RFP, based on a conversation they had with Corvis VP of engineering and CTO of government products David Smith. "Contenders include nearly every vendor imaginable," says the Merrill note. "Because GIG-BE is a typical government RFP... we expect this will infuse complications and delays. More importantly, we do not expect contract awards until late 2003." Corvis officals said they do not comment on stock price movements.

— R. Scott Raynovich, US Editor, Light Reading

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photon_tim 12/4/2012 | 11:59:30 PM
re: Corvis Spikes on DISA Talk Redback had 15 times normal trading volume today.
Stock went up more than 53% in a single day.

What is going on ??
Eye-in-the-Sky 12/4/2012 | 11:59:29 PM
re: Corvis Spikes on DISA Talk >>> Single-digit midget <<<
The "PERFECT" description!!!
skeptic 12/4/2012 | 11:59:27 PM
re: Corvis Spikes on DISA Talk I also agree that your Corvis bashing is quite obvious and constant. Not really acceptable in the world of REAL journalism!

Corvis is a money-losing pit which survived
the bubble because it has a mountain of
cash left over from a bubble IPO. Its business
fundementals are rotten and it has barely
any customers. It sells products (ULH and
undersea) in segments unlikely to recovery
anytime soon. And unless broadwing proves
profitable, a 50m contract isn't going to
save them.

Your confusing journalism with the sort of
blind hype that the corvis true-believers
live on.
Sparxe 12/4/2012 | 11:59:25 PM
re: Corvis Spikes on DISA Talk
Nice story Scott, Too bad it was 8 hours late and a dollar too short.

CORV stock was flying high by noon today, far before the WSJ ran the first story. In addition, the first three posts today on the CORV board were written AFTER the WSJ story appeared. We were not speculating we were just passing the news along.

Two points in closing:
1, The run up in several small cap optical companies is not entirely based on the GigBE. There have been at least 20 varios press releases over the past two weeks about tier one carriers wanting to get in the Video biz OR cable outfits wanting to be in teleco... thats what the runups about.
2, How come you or anyone else around here wrote an article when yesterday Lehman Bros was puffing their stable as eventual winners? That story was all over the place (cept here) and nobody but me challenged it?

Maybe you could get a "Lets hate Corvis club" going....

Sparxe Nj
Kumite 12/4/2012 | 11:59:25 PM
re: Corvis Spikes on DISA Talk Dave,

I have read the RFP and unless I overlooked it there is nothing in writing that says "no foreign owned companies will win so don't bother to bid".

Officially, anyone can win the business. Will American owned firms have a slight advantage, i would have to say yes, but they have to meet the Tech specs and the business viability and ability to execute areas as well.

So let's see who that leaves out in the cold shall we.

Corvis is in the red, turned a WHOLE $1.5 million in quarterly revenue and just spent a bunch of their cash to become a competitor to their customers by buying Broadwing. They will not be selected.

Ciena needs to turn $130 million more per quarter just to break even and although they have a bunch of cash they are also spending it buying Wavesmith and such. Even if they won $260 million worth of business from the govt that only makes them break even for 2 quarters and then right back in the red again. They are out.

Lucent is still 3 quarters away from profitability and have little to no committment to the long haul space. They have a play for the MSPP.

Alcatel, well they are French so that rules them out. Besides that their equipment is junk.

Nortel has newer toys to sell being the HDX and DT in the LH space plus a plethora of MSPP products (3000, 5000, OMC, etc). They were also profitable last quarter. They are Canadian so they'll have a better shot than most foreign companies since i think they employ more people in the US than in the rest of the world combined.

Other players like Fuji, Innovance, Siemens, etc I just don't know.

My 2 cents.

CogswellCogs 12/4/2012 | 11:59:25 PM
re: Corvis Spikes on DISA Talk Nothing in life is certain except death and taxes (and LR slamming Corvis at every available opportunity). --Benjamin Franklin

More slanted, biased, anti-Corvis crap, brought to you by the award-winning editors at LR. Oh, that's not an award - you MAY have won ONE MILLION DOLLARS from Publisher's Clearinghouse!

It's amazing that you guys still hold a grudge against Corvis after all these years simply because they wouldn't show you what was under the hood.

By the way, today's closing numbers:
Alcatel - $9.02
CIENA - $5.56
Lucent - $2.26
Nortel - $3.08
Sycamore - $4.07

But, of course, these are all "single-digit gems".

Ever stop to wonder why all of the quotes from Corvis, such as David Smith's in this article, have to come from other sources? If you were Corvis, would you talk to LR?

Remember way back when LR removed a featured 'quote of the week' about Corvis because it was so blatantly inflammatory? I believe it was from Dan Smith of Sycamore, but LR was proud to display it front-and-center... at least until a call from Corvis 'persuaded' them to remove it. Real brave, using someone else's words to do your dirty work. I guess you should be congratulated now for actually making up the insults by yourself, but I think maybe it's time for you boys and girls to grow up.

Kumite 12/4/2012 | 11:59:22 PM
re: Corvis Spikes on DISA Talk dgroves0,

Please keep your stuff straight if at all possible. The Q&A's you mention are from the Fiber RFP, not the equipment RFP. Only Annex A of the Fiber RFP is classified as it discloses the actual site locations. Any foreign sub mentioned in there is not allowed to know the purpose of the fiber they have been requested to provide. This question was generated to support the Europe and Pacific fiber acquisitions.

The equipment RFP, posted on the SAIC site, not the DITCO site, has no classified portions whatsoever as no actual site locations are given.

Whoever wins the contract, if they are required to do on site installs will have to jump through the security clearance hoop at time of award.

There is enough BS on this board without you adding to it.

dgroves0 12/4/2012 | 11:59:22 PM
re: Corvis Spikes on DISA Talk FROM QUESTIONS AND ANSWERS #4 AT THE ditco site



Ref: DD Form 254, Reference Block llL (2)

c. If a foreign company/national is approved, does the granting of an export license allow the sharing of the classified information with the approved foreign company/national? Does the application for the export license occur prior to or after contract award?


c. No classified information will be shared with a foreign company/nation. An export license does not allow sharing of classified information with non-US citizens. Application and granting of export license must occur prior to export of information.

fiber_r_us 12/4/2012 | 11:59:18 PM
re: Corvis Spikes on DISA Talk Whether the RFP language allows for awards to foriegn companies or not, I just can't see the US Govt awarding a contract to a Canadian or French company so soon after both countries showed their true colors when their support was needed.
skeptic 12/4/2012 | 11:59:18 PM
re: Corvis Spikes on DISA Talk Whoever wins the contract, if they are required to do on site installs will have to jump through the security clearance hoop at time of award.

The equipment vendor doesn't necessarly have
to do the on-site installs. What I've seen
happen in the past is that another company
gets involved which is trusted by the
government and that company handles all the
on-site issues and acts as a wall between
the foreign company and the government.
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