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Technology Stocks : Lucent Technologies (LU)
LU 2.650-2.9%Nov 14 9:30 AM EST
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To: hitesh puri who wrote (11744)12/17/1999 10:18:00 AM
From: Mr.Fun  Read Replies (3) of 21876
 
Based on discussions with dozens of buy siders and sell siders, I believe there is a lot of money on the sidelines with LU written on it. Everyone is waiting for the quarter (Around Jan 25) as there is about $500M in generic switch software orders being held up for customer acceptance by RBOC customers that could come in this quarter or next. These customers are using Y2K as an excuse to attempt to extort a discount that will not be forthcoming from Mr. McGinn. Nonetheless, the customers could back down, needing to spend out their 99 budgets - making this an upside surprise, and the stock would shoot up like a rocket. Otherwise, the revenues will come in to the low side of guidance, say $10.8 to $11.0B we see a small pull-back until everyone realizes that "This $500 M didn't disappear, it will show up in March" which will bring in the buy orders and the stock will shoot up like a rocket.

The situation is not dissimilar to NT this time last year. NT was trading at a 35% discount to NT, it was obvious that the gap would close somewhat, and the rest is history. On a P/E basis, LU now trades at a 45% discount to NT - I don't think even NT bulls think that is appropriate. LU will more than double over the next 12 months - don't fret over a month more of dead money.
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