Zhone Rezhones (Again)

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fgoldstein 12/4/2012 | 10:48:13 PM

re: Zhone Rezhones (Again) Is Excel really closed? It certainly has a lower profile than before, marking it as another of Lucent's bad acquisitions, but I note that Network Telco has a new CO switch out which is built around the Lucent/Excel core. So it seems to still be available.

Looking back at what these guys paid for everything is like a bad dream. It looked weird then but nowadays, wow. Of course the Cascade/Ascend building is a ghost town nowadays -- the CBX500 was a great workhorse, but it's losing steam fast due to Lucent's decline. Stinger still has its fans, but you can get quite a deal for them on the used market.

Zhone's ex-NT UE9000 looks like it competes head-on with Lucent's AnyMedia. I know of a few out there but I doubt it's seen widespread deployment.

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techoriginol 12/4/2012 | 10:47:58 PM

re: Zhone Rezhones (Again) Zhone's only intereset is making sure that the financial numbers look good so that they can IPO ASAP. They are effectively trying to fool potential investors by showing that they have been cash flow positive for numerous consecutive quarters. They give no concern over their product, the development of their products, supporting
the customers or moving forward with the products. With the recent round of layoffs they have lost major areas of expertise in their product lines. They cannot support most of the cards sitting in their Access shelves. At this point they cannot setup their lab facilities, or perform verification, or move forward with new releases. They will not be able to power down, dismantle, move and power up their equipment should they ever need to move to new facilities.

I feel sorry for the investors (except Mory and Jeanette) and future investors that have seen (or will see) their portion of the 500M wash down the drain. "At this point we flush".

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memyselfandi123 12/4/2012 | 10:47:56 PM

re: Zhone Rezhones (Again) If anyone doubts that, take a look at this article just published about a month ago.

http://www.oaklandtribune.com/...

They must have gotten "hire" mixed up with "fire". Notice it is the same comapny mouthpiece in both articles.

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AAL6 12/4/2012 | 10:47:56 PM

re: Zhone Rezhones (Again) I would like to know more about those "investors" who would like to touch Zhone with a ten foot pole now. If there are some like that, they must be Mory's buddys (like some were in Lucent when it bought Ascend) and in that case the value and the quality of the company doesn't matter.

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buddhamonk 12/4/2012 | 10:47:49 PM

re: Zhone Rezhones (Again) I don't see how this company can possibly go IPO.

~300 mil. outstanding shares.
Legacy equipment that it is unable to support.
No CFO (I guess Wetsel was redundant).
~100-150 mil. revenue.

At best, this company could possibly be a $1-3 stock near term (<6 month).

It is great to be cash positive, but doesn't that really need to be achieved through sales growth rather than drastic cost cutting?

Where is the growth going to come from?

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lrdr 12/4/2012 | 10:47:45 PM

re: Zhone Rezhones (Again) Westel was made redundant? I didn't hear that.

It's best case plan is to IPO after it announces a deal slightly larger than the largest telco in central Iowa (I'm not kidding, that's the latest deal announced on their website).

The stock is already pretty diluted, given how many shares are outstanding.

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buddhamonk 12/4/2012 | 10:47:43 PM

re: Zhone Rezhones (Again) I've only heard about Wetsel from one person, can anyone confirm or deny? Seems like a change of CFO is something Zhone would need to make public.

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dietaryfiber 12/4/2012 | 10:47:42 PM

re: Zhone Rezhones (Again) Zhone is not a public company and therefore does not need to make public the comings and goings of any employee. If it has layoffs that are big enough, then it needs to inform the public per local regulations.

dietary fiber

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dietaryfiber 12/4/2012 | 10:47:42 PM

re: Zhone Rezhones (Again)
The UE9000 and AnyMedia were both tremendous failures in the market. Nortel dumped the UE and AccessNode. Today, most of Zhone's revenue comes from AccessNode. I would be curious to find out if they have made the UE work properly yet, as Nortel had not yet done so. AnyMedia at least works, even if it can not compete effectively with other products in the Market (Its hard being 4th in-line behind even the old Reltec D*scus Product.)

As for an IPO, a company with the revenue stated will not have a $500M enterprise value. This is especially true given the age and reputation of its main revenue products (the Premisys and Nortel Boxes). Why would anyone invest unless there was some significant traction for BAN? The other products will wither over time. So unless BAN goes well, Zhone is at the top of its revenue curve.

dietary fiber

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fgoldstein 12/4/2012 | 10:47:41 PM

re: Zhone Rezhones (Again) > I would be curious to find out if they have made the UE work properly yet, as Nortel had not yet done so.

I just talked to a real live UE and AN customer, and no, Zhone hasn't gotten it all working yet. So much for product promises.

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