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Technology Stocks : Lucent Technologies (LU)

LU 2.560

+0.4%

3:59 PM EST

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To: Elroy who wrote (20944)	10/15/2002 11:12:09 AM
From: David Hansen	Read Replies (1) of 21876

It's a pretty exciting horse race though, isn't it? What will happen first: Will LU pull out of it's dive in time to have a sustainable business or will irreparable harm be done to the business in her drive to be break-even? Few people thought it would come down to the wire like it has... I think now there are few people who think LU can do it. One thing is certain: the outcome will be decided upon the unforeseeable events of the next 2-3 quarters. That has been the case in the last 2 years for LU. Unfortunately, just about every unforeseeable event has been negative. I am betting that the market forces will act like a rubber band that has been pulled too tight in one direction. Eventually, there will be a forceful but temporary move in the opposite direction. Will this happen within time to save NT/LU/ERICY/ALA? There is a lot at stake for any of the dominant (historically) telecom vendors if they go out hard. I think eventually, the RBOCs will vote more of their pocketbook to the vendor(s) they want to still have around. LU is positioned pretty good to be a survivor in that case. The possibility of a merger for LU is also still pretty good. Hard to see who is ready and willing to bet their entire future on it? I don't see Cisco willing to take such a risk. HP is still swallowing Compaq; IBM is still exiting the equipment business… Personally, I am still optimistic that LU will survive and be a player. We will know within six months, I think the writing will be on the wall by then. I hope that they do not cannibalize Bell Labs too heavily in the restructuring effort now going on. The future for LU will be decided organically and not through any acquisition. They need future products for the next round of growth which should be very profitable as competition is washed out. The future will be fiber/optical to the home. I think the bandwidth demands of the future will require it… Let’s see what happens.

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