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

To: Mr.Fun who wrote (14506)	4/24/2000 10:58:00 AM
From: telecomguy	Respond to of 21876

Mr. Fun, I respect LU greatly and as I have said many times, LU will be NT's competitor in the optics sector not CSCO for the forseeable future. I am however not sure why compensation plan snafu would have such a huge impact on their revenue numbers. My understanding of network business is that usually the revenues you recognize are from backlog contracts that have been booked months and months prior. To recognize revenue, LU and NT has to DELIVER and complete the buildout for their clients. So I agree that the optics was only one small reason for their recent failures -- but this brings up the more important question of why LU failed last quarter. EXECUTION & DELIVERY. Throwing out excuses like wrong optics platform decision made in 1996 and sales comp plan simply does not wash to seasoned analysts who knows that revenues are recognized for delivery & installation of sales backlog. Rather than question NT's valuation (which is a separate topic), perhaps we should be discussing why LU's valuation is where it is........ If the networking market is as big as the pundits are claiming and are going to be growing at double digit rate for the forseeable future, it seems to me that valuations on NT and CSCO are not necessarily completely off-base but that LU's valuation is a reflection of their mgmt weakness in capitalizing the huge opportunity that awaits any networking vendor who can deliver the right product/technology in the next 5 years. There are some major paradigm shifting (driven by technology) changes going on in the communication world and if LU's mgmt makes few more mistakes, the risk is much more magnified than decade ago when it was still more of a "gentlemen's club" between the telcos/ptt's and the equipment vendors. All gloves are off and companies that can deliver TODAY what the Carriers WANT/NEED will not only win prosper marginally, they will prosper greatly -- that's the nature of high-tech game. Just ask 3COM, DEC, and lot of other companies that I can't remember right now.