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Technology Stocks : Lucent Technologies (LU)

LU 2.660

+1.1%

Dec 10 3:59 PM EST

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To: Elroy who wrote (20705)	8/26/2002 10:35:25 AM
From: David Hansen	Read Replies (1) of 21876

Lucent has never been a fine tuned machine ever. LU was given birth by the divestiture ordered by Congress because of it's monopoly status... Monopolies are known for inflated wastes because there are no drivers to enforce fiscal discipline. Shortly after the divestiture, the telecom growth bubble started. Hyper-growth is also not known to be an incubator of corporate efficiencies. This down turn is probably the best thing that could have happened in the long run for Lucent. Competition was eating at her heals and gobbling up lot's of business. How long would it have taken if the telecom bubble continued for LU to be blown away by the likes of Cisco? LU had an early start in changing directions and bad habits (by at least a year). We have seen some painful and necessary decisions as LU - for the FIRST time has had to instill discipline in CAPEX, OPEX, headcount, product mix, R & D, etc. LU is not done yet. I think next you will see Bell Labs trimmed to match the current realities. I think LU is way too top heavy with far to much management as much of the reduction to date has probably come from the rank and file. I'm hoping they are now looking at the next 10% to be coming from these areas. Imagine the profitability that LU could potentially generate once her financial house is in order. Cisco has proven that this is the true way to compete in the 21st century. I think LU is learning this new rule. Compare even Cisco at her current 105 BB market cap to LU's 5.3 BB market cap. Where do you think the best potential for making money lies? I'm not saying it's without risks and I'm not saying what the timeline will be but the possibility of great rewards are to those who stick with the dog's who survive and are turned into winners.

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