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

To: stilts who wrote (11979)	1/2/2000 2:11:00 PM
From: abbigail	Respond to of 21876

Dear Stilts: " ...As far as the concept of recourse, or risk of loss to Lu, with which you and RVTucker have tried to spook this thread, the risk to Lu is the same whether Lu did the securitization or not: if Lu had not done the deal, Lu would still have been subject to the same risk of loss if any of the receivables prove uncollectable. By doing the securitization transaction, the only effect it had on Lu was that Lu was able to immediately collect $600 million in cash (at a 4% discount to the buyers for their time value of money)... " I agree with your analysis. Of course one can nit-pick company financial statements to death, and if you have the time and resources, may get to the "truth" about the past, but we must anticipate the future and place your "bets". RVTucker disclosed he is not betting on LU. How about Chuz? I took the time to download and read the 10-k dated 12/21/1999, all 136 pages. Management discloses the changes in cash clearly... "Cash from operating activities decreased $2,136 million in 1999 compared with 1998 ... due to increases in receivables ($3,183M) and inventories ($1,612M)..." and "Lucent will continue to provide or commit to financing where appropriate ... Lucent believes that its credit facilities, cash flow from operations, long- and short-term debt financings and receivables securitizations will be sufficient to satisfy its future ... requirements ..." I do not think ANYONE outside the company is in a position to know whether the finances of LU are being managed to optimize the bottom line, including MSSRS Chuzz and RVTucker. I do think they are selectively fly-specking the 10-k, ignoring more important information about revenues increasing 15.2% in 1998 and 20.4% in 1999, in all reportable market segments, and management's assurances about finances. Abbigail

To: stilts who wrote (11979)	1/2/2000 9:01:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 21876

Stilts, you are incorrect in any number of points you make. First, let me assure you that there are methods whereby excess collateral need not be applied to the securities. Second, I am not intending to spook anybody. I am simply sharing my concerns about these transactions. (I am long LU, and have been since the IPO, and added to my position directly and as a result of the ASND acquisition) Third, there is nothing mysterious or spurious about the issues I brought up, nor were any accusations made. Finally, the issue I raised is not the wisdom of the deal, but rather the sufficiency of cash flow to fund future growth. There seems to be an unhealthy mentality of being "with us or against us" that permeates too many of these discussions. I would hope that a dispassionate discussion of these financing deals would illuminate what's going on. Where did you see the 4% discount? And what do you believe the terms and covenants of the securities to be? I saw nothing of those details in the 10-K. TTFN, CTC