Ciena Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of networking equipment maker Ciena (NAS: CIEN) have popped by as much as 13% after major domestic wireless carrier AT&T (NYS: T) abandoned its $39 billion pursuit of smaller rival T-Mobile.

So what: With the acquisition off the table, AT&T's spending budget will have some extra dollars to go around, minus the $4 billion breakup fee. Ma Bell had been cutting back on spending in order to try to push the deal through, so its presumed resumption of network buildout is seen as a positive for networking companies.

Now what: Barclays Capital analyst Jeff Kvaal had said that AT&T's mobility-related spending had dried up around September, and that equipment makers close to base station vendors would benefit most. Kvaal believes that companies like Ciena, Cisco Systems (NAS: CSCO) , and Juniper Networks (NAS: JNPR) will benefit indirectly, since they have less direct exposure to AT&T. Ma Bell's capital spending is expected to pick up significantly starting in the first quarter of next year.

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At the time thisarticle was published Fool contributorEvan Niuowns shares of AT&T, but he holds no other position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Cisco Systems. The Fool has created a bull call spread position on Cisco Systems.Motley Fool newsletter serviceshave recommended buying shares of Cisco Systems. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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