Is Infinera Ready for an IPO?

The long-awaited Infinera Corp. (Nasdaq: INFN) IPO could be ready for takeoff within the next few weeks.

Infinera has sent lock-up agreements to its shareholders, sources say, barring them from selling stock within a certain time period. It's a routine part of the IPO process and, if it's really happened, is a sure sign that Infinera is ready to file its S-1 with the Securities and Exchange Commission (SEC) .

"I have definitely heard the S-1 is close to imminent," says Joe Chiasson, an analyst with Susquehanna Financial Group . Chiasson hadn't heard about the lock-up agreements but notes that the timing for an Infinera IPO seems right.

"Clearly, the market is back," he says. "The market has looked as healthy as it has to me for seven years, in terms of demand."

Infinera, which sells a highly integrated DWDM system, has long been presumed to be on an IPO track. (See Infinera Declares WDM War.)

A growing customer list that includes XO Communications Inc. -- and a bit of testimonial from BT Group plc (NYSE: BT; London: BTA), which said Infinera might find a place in the 21CN project -- got Infinera reinstated to Light Reading's Top Ten Private Companies last year. (See Infinera Inc.)

IPO speculation flared up in the summer, sparked by the company's sudden change of CFOs in June. But the company also scooped up some funding in July, possibly a sign that it was knew the IPO would have to wait a bit. (See Infinera: $1B IPO Imminent?, Infinera's CFO Quits, and Infinera Raises Another $110M.)

So, is this latest round of talk the real thing, or just another tease? Infinera won't tell; a spokesman contacted by Light Reading reiterated the company line about not commenting on financial matters.

— Craig Matsumoto, West Coast Editor, Light Reading

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lpskeptic 12/5/2012 | 3:16:08 PM
re: Is Infinera Ready for an IPO? Infinera is very innovative company which has gotten off to a good start by getting good Tier-2 accounts. They have had a great ramp up in revenue, atleast from various speculated amounts of $100m in 2006. However, some key questions remain:

- there have been significant doubts in carrier and equipment industry about Infinera's ability to bring yields on their ICs up high enough to generate long term positive profit margin. This issue needs to be addressed in a clear manner by the company
- Infinera has good customers in XO, Level 3 and others, but they have yet to say what their target market is. Is it the Tier-2 market or Tier-1 carrier market?
- If it is Tier-2 carrier market can they have enough volumes on their PICs to achieve profitability? Do they have enough pricing power or are they selling on the cheap to gain market share?
- Their DTN architecture seems well suited for smaller carriers and/or business carriers where the focus is on reducing add/drop costs. What about larger carriers where traffic has to pass through multiple nodes and where numerous carriers studies have clearly demonstrated that all-optical is the lower capex solution?
- Some people say that they are a small company with big company expenses. What is the accurate picture here?

Finally, what price they ask for per share and requested valuation could determine if they turn out to be the next Vonage or not?

chips_ahoy 12/5/2012 | 3:16:08 PM
re: Is Infinera Ready for an IPO? Steven A Smith!
Pete Baldwin 12/5/2012 | 3:16:08 PM
re: Is Infinera Ready for an IPO? Litereading -- Lighten up! I'm just trying to see if people like the idea of a public Infinera, or if they think it's the next Vonage. It's not like the underwriters are gonna knock on your door and demand cash if you answer "yes"!
litereading 12/5/2012 | 3:16:08 PM
re: Is Infinera Ready for an IPO? "would I buy in?" Well, Craig, can you tell me if they are profitable, or have a reasonable chance of being profitable? Buy in? At what price? Are they cash positive? If not, how much cash are they burning, and what is their strategy for turning cash positive?

Sure I'd buy in if they profitable and cash flow positive, or will be relatively soon, and the price per share gave a return on investment as good as any other I can find.

Or, to answer more honestly, given the amount of financial info on this company (which is zero, unless you have inside info), how in hell, Craig, can anyone honestly answer that question.
Pete Baldwin 12/5/2012 | 3:16:08 PM
re: Is Infinera Ready for an IPO? So ... If they go public, would you buy in?

(On a related note, check out the poll on telecom stock picks:


litereading 12/5/2012 | 3:16:07 PM
re: Is Infinera Ready for an IPO? Ninj-tortoise - are you an insider, or just someone with inside information? Can you spell S-E-C?

Craig, lighten up? Er, sure. But the point, is ask the question after they've filed and begun the disclosure process. Then the question has relevance.
ninjaturtle 12/5/2012 | 3:16:07 PM
re: Is Infinera Ready for an IPO? Try a $250M 2006!!! Will they go IPO? Yes very soon. Will they be profitable. Have you tried to download YouTube lately? Yes they are. The razors (line cards will be shipping out in droves in 2007) expect this to be the biggest optical IPO since the BOOM years in 1999-2000.

How do I know all this? I just do. Therefore, read this in a few weeks/months and see if it is fact. Your choice. You had better get in when it launches. Vonage!!! Give me a break. This is what the entire internet needs if it is ever going to deliver what the customers want...and that means you and me.
ninjaturtle 12/5/2012 | 3:16:07 PM
re: Is Infinera Ready for an IPO? Thanks for worrying about me. But I'll never tell.

Take 3 guesses and the first two don't count.
ninjaturtle 12/5/2012 | 3:16:06 PM
re: Is Infinera Ready for an IPO? I was wondering when "why" was going to speak up and provide us his usual positive input. This dude is truly bitter. Pathetic is more like it.

Keep up the good work at Wal-Mart. Did you qualify for benefits yet?
whyiswhy 12/5/2012 | 3:16:06 PM
re: Is Infinera Ready for an IPO? It's actually true Infinera has solved both their yield and profitability problems: they are simply going to unload them onto greater fools willing to buy into their IPO!

Too bad the supply of fools has diminished since the bubble days.

The fools are demanding numbers before they supply their cash these days.

Try again Vinhod.

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