SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Lucent Technologies (LU)
LU 2.550+2.4%Dec 1 3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: GVTucker who wrote (21025)10/24/2002 9:06:05 PM
From: bofp  Read Replies (1) of 21876
 
GV,

Actually, only the management pension plan is underfunded, yielding the charge to equity. The larger pension plan for operating personnel remains significantly overfunded. While LU can not transfer the surplus from one plan to another, it is also important to note that LU will not be required to pay any cash into the underfunded plan for at least FY03 and probably FY04 as well. If we are concerned about cash balances and liquidity vis a vis bankruptcy, the pension plan is a non issue for the next two years.

As far as the dilution already happening - au contraire. The degree of dilution will depend entirely on the price of a LU share at the time of the August 04 Put. If the price is still less than $1, the dilution is 4 times what it would be at a $4 conversion. This is why LU is buying in the convertable NOW.

As to why the stock was up today - I would point to the SBC conference call, where CEO Ed Whitacre made a plea for regulatory relief, stating that LU and NT must survive for the future of US telecommunications. Sort of give me what I want, or I'll shoot this dog. Since FCC chairman Powell is on record as saying essentially the same thing, many investors are thinking that the trienniel review of UNE-P regulation will give the RBOCs relief.

Also: Bloomberg reported that both VZ and BLS have given LU baselevel commitments for CY03, suggesting a reason for LU's confidence in the March quarter.

There was also a hedgefund going extremely LONG LU for most of the day.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News