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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: stilts who wrote (11894)	12/23/1999 1:54:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 21876

Stilt, sorry, I stand by what I said. Look at the words: Lucent sold approximately $625 million of accounts receivable to a non-consolidated qualified special purpose entity ("QSPE") (this is a creation of LU -- it is not another corporation!) which, in turn, sold an undivided ownership interest in these receivables to entities (who owns these entities? are they more LU entities or are they other companies? the 10-K does not say) managed by an unaffiliated financial institution. Also, nowhere does it mention the consideration received for the A/R. And the word 'cash' is not mentioned at all in the transaction. It is only mentioned in the cash flow statement, which, as I explained before, is simply a consequence of considering a security a financing activity, not an operating activity. The bottom line is we don't know what LU got for it, but the cash flow statement seems to indicate that they did not get cash! TTFN, CTC

To: stilts who wrote (11894)	12/23/1999 10:13:00 AM
From: Clay Takaya	Read Replies (2) \| Respond to of 21876

Stilts, I think Chuzz's point is that the positive cash flow that LU showed last quarter was a result of this repositioning of this receivable and not as a result of operations. Someone please correct me if I am wrong, but my understanding is that Mr. Fun was claiming that the positive cash flow was exclusive of this item. IMHO, Chuzz's concern is that operationally, LU is in a cash depleting business model and must dip into the till for more fuel. This is worth keeping your eye on. Clay