Hi Anonymous,
While I don't really post on this thread, I do (or perhaps the correct tense of the word is "did") lurk here regularly.
Earlier this week, I dumped my Lucent shares (in anticipation of the now announced reverse split). I also dumped Avaya (they "owe" much more in pension liabilities than what I think the entire firm is worth) and both my Agere "A" & "B" shares (a clean sweep for Lucent and all the spin-offs).
In my opinion, the reverse split is a lost cause and a supreme effort in futility. The battle is lost. Practically speaking now, the company has only one viable choice (as far as I can see) and that is to declare bankruptcy and wipe the slate clean. It's a very difficult decision for them to make, as I'm sure that executives, the Board, rank-and-file employees, the pension fund(s), etc. hold tons of shares and perhaps even some of the debt. They can postpone what I see as the inevitable decision, but sooner or later BK is the only choice that makes any sense if the company is to survive in any semblance of its former self.
Next month, next year, pick a time frame... Some of these telecommunications companies are going to go belly-up. It could be Lucent or Alcatel or Nortel or Corning or pick any other company of your choice. The bottom line is that the first company to declare BK is likely to emerge in far better shape than any of its competitors that don't, so (in my opinion) it's a far better thing to be at the head of the BK queue rather than waiting for another company to be in the vanguard when the unavoidable choice must be made.
Again, this is all in my opinion. The industry could turn around on Monday morning, and the stock could rise to $20 by market close on Thursday. And the Tooth Fairy might leave an extra quarter under our pillows tonight, with which we might be able to buy another few shares of some telecommunications outfit... <g>
No, the handwriting is now on the wall, and it's clearly legible. Someday I'll get back into the sector, but that day won't be anytime soon...
KJC
PS - Your assumption about a big loss was spot on in my case. This stock (along with the spin-offs) is my single largest investing catastrophe ever, in terms of total dollars lost. And I squarely blame McGinn for the losses. Had he been more forthright when he was at the helm, I think the losses that Lucent suffered might not be as great as they are now. |
