x y zebra, Lucent is a fine company but grossly overvalued. The actual price of Lucent should be in the $40 range.
The growth story is a Wall Street BS story to sell you more stock and profit from you. Growth is a general tendency of any business until it saturates the market or fiece competition arives. As it is in Lucent case. ALA, ERICY, SIEMENS, NT,Fujitsu, NTT, Matshusita (spell??)and a host of others small and big.
Lucent was a momentum stock until this summer, therfore the sharp run-up. take a look at NT, also the closest competitor.
Lucent was/is in the same category of CSCO, DELL, MSFT all grossly overvalued stocks which are perceived as monopolies but are not, in the real market place. All companies confront very high competition same as HWP, IBM, SUNW, CPQ in their own businesess.
Therefore the multiple premium on growth and earnings is not warranted.
Stock preices are priced based on perception not fundamentals, otherwise how can one explain the prices of YHOO or AMZN.
On option expiration, Lucent closing between 57.5 to 65 will make me money this week.(due to intricate option hedges)
BWDIK
Haim |
