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Technology Stocks : MONI - Marconi Nasdaq ADR -- Ignore unavailable to you. Want to Upgrade?

To: David Hansen who wrote (122)	7/3/2002 9:01:43 AM
From: elmatador	Respond to of 129

If MONI goes down in this agonizing pace, it is to be inferred that LU and NT will also go very very slowly to the grave. It was the first vendor to slip in the banana peel -with a foot already inside the grave- and have not yet disappeared.

To: David Hansen who wrote (122)	7/12/2002 6:42:17 AM
From: elmatador	Respond to of 129

A year in the death of Marconi Sorry tale of once-great firm sums up the market By Peter Bale FT Investor, 13:02 BST Jul 4, 2002 LONDON (FT Investor) - Exactly a year ago Marconi dropped a bombshell which is still reverberating through the market and which foreshadowed a year of crisis for investors. On July 4, 2001, with its many US shareholders unable to trade on the Independence Day holiday the company suspended its shares for the entire day and then announced a huge profit warning after hours. It was a warning many people, except Marconi [MONI, News, Chart, Research] directors, had seen coming a mile off after competitors had repeatedly said they saw a downturn in the telecoms equipment market. Marconi, however, failed to see the tide racing in until it was underwater. Those were the days Before the suspension Marconi [MONI, News, Chart, Research] shares traded on July 3, 2001 at 245p a share. Today they are a risible 3.6p and probably worth less than nothing. The company is now in the control of bondholders and bankers, owed more than £4.3bn, who have first claim on its assets. It is a company no longer run in the interests of shareholders - though investors may wonder if it ever was under former chief executive Lord Simpson and his finance sidekick John Mayo. See FT.com story on Mayo and his explanations The story of Marconi is a story of the market itself - a two year slow-motion horror story of decline and destruction of wealth on a grand scale during which the FTSE 100 [1805550, News, Chart] has slid 33 per cent from a peak of 6,738 in March 2000 to 4,450 now. On the day of Marconi's suspension a year ago the leading London index was 25 per cent higher than it is today. All in the same boat Marconi is so symbolic and so important because so many investors held it. From its days under Lord Weinstock as GEC it had been seen as a solid, must-have, blue chip investment. An essential part of any investor portfolio. Under Simpson it became a racy technology stock, riding a wave of acquisitions and giving Mum and Dad investors a chance to ride the tech boom. It peaked at more than £12 in late 2000. Investors anxious about the chances of a British WorldCom [WCOME, News, Chart, Research] or Enron should realise that in a sense it has already happened. While no one has suggested fraud or accountancy wrongdoing at Marconi, the impact of the management decision-making and the resulting collapse in shareholder value is the same. Marconi shareholders - many of them employees, like those in Enron, have lost everything - investments, pensions and jobs. Marconi has sacked thousands of workers over the past year. But the collapse of Marconi is only the most graphic case of investor oblivion in the two years of inexorable market decline since the tech bubble started to lose air in March 2000. Telecoms, media and technology Vodafone [VOD, News, Chart, Research] [VOD, News, Chart, Research], probably the most widely held stock by ordinary investors and institutions alike, has fallen 80 percent from its peak two years ago - 380p to around 80p. BT Group [BTA, News, Chart, Research], another victim of management hubris and the bursting of the bubble, has fallen 77 per cent to 241p - maybe a little less if you include your MM02 [OOM, News, Chart, Research] shares in the mobile unit spun off from BT. Reuters [RTR, News, Chart, Research] [RTRSY, News, Chart, Research], the news and data group popular with British and US investors since its flotation in the early 1980s has fallen 80 per cent from its peak in March 2000 of £16.20 to 324p. One thousand pounds invested in Marconi shares would now be worth £14.68 Defensive stocks like BP [BPA, News, Chart, Research] have also been battered, though shareholders will at least have been able to hang on to the bulk of their capital. Two years ago it was 600p a share, now it is a creditable 534p - a loss of 11 percent and offset by a healthy stream of dividends from the oil company. British American Tobacco [BATS, News, Chart, Research] was a mere 249p just as the tech boom burst in March 2000. It has been a more than safe haven for your money, rising 189 per cent to 720p. Had you switched out of Marconi into BAT the day before the Marconi suspension you might have had the moral dilemma of tobacco but saved some skin. One thousand pounds invested in Marconi shares the day before the suspension on July 4 would now be worth £14.68. The same amount invested in BAT at the same time would be worth £1,340. Lemmings move in If that sounds depressing it is also worth remembering that almost for the entire year since the Marconi profit warning - the first one - and the long downward spiral to near-bankruptcy - the stock has been among the most-bought by individual investors each week. Having lost their shirts at the top of the market, many investors have lost even more on the day down, buying into a falling stock. See latest FT Investor Top of the Stocks. The announcement from Marconi last month that its pending deal with bondholders and bankers would lead to a "very significant dilution in value for existing equity holders" was a marvellous piece of very English understatement. Code for "shareholders get nothing". See Marconi warns of major dilution "Today my Marconi investment portfolio shrank to the proportions of a small coin purse" - an investor writes. The only consolation, if any, is that you are not alone. Marconi may be only the most spectacular example but anyone holding a significant technology, media or telecoms stock over the past two to three years is in a very similar, leaky boat, postponing those dreams of early retirement and rethinking plans for private schools. As long-suffering Marconi shareholder and employee, Dr Ruth Pottinger, wrote in a recent letter to FT Investor: "Today my Marconi investment portfolio shrank to the proportions of a small coin purse...However, if I can scrape together the bus fare I will attend the AGM; after all it is nearly a year since I visited the circus!"

To: David Hansen who wrote (122)	8/28/2002 4:45:01 AM
From: elmatador	Respond to of 129

Marconi shareholders' worst fears confirmed By Ben Hunt, IT Correspondent Published: August 28 2002 7:36 \| Last Updated: August 28 2002 7:36 Marconi on Wednesday confirmed the worst fears of its long-suffering shareholders when it said the restructuring plan, still being negotiated with creditors owed £4bn ($6.13bn), was likely to leave them with just a 0.5 per cent stake in the group. As part of the massive debt-for-equity swap that will be the centrepiece of the refinancing and which will leave Marconi owned by its banks and bondholders, shareholders will also be offered "warrants allowing the purchase of 5 per cent of the issued share capital, subject to certain criteria". The telecommunications equipment group quashed hopes of an immediate end to months of painstaking negotiations with creditors, however, as said "talks with creditors ... are continuing". Marconi has been in negotiations with banks owed £2.3bn and bondholders owed £1.7bn, since the middle of May, and while all substantive issues are understood to have been resolved, the group has been prevented from announcing an agreement in principle by a string of last minute problems. The group also revealed that it was likely to carry net debt of about £300m following the restructuring. It added: "The prospective capital structure being discussed has been designed to provide flexibility for Marconi Group's ongoing success, maximise cash and overall recovery for creditors and allow existing Marconi shareholders to maintain an ongoing economic interest in the Group." It is understood that the group has between £500m and £600m in cash, at least half of which will be used to fund working capital requirements while the remainder is set aside for security against certain continuing liabilities. Marconi’s shareholders have already suffered a virtual wipeout in the value of their equity which has fallen from a high of more than £12 at the height of the telecoms boom to lows of just 1.5p. On Wednesday morning they edged up about 0.04p to 1.75p despite the bad news. Marconi forewarned shareholders of a “very substantial dilution” in equity value last month, which sparked a rush among investors to dump the stock, driving the price down to its current levels. The award of even 0.5 per cent of equity to shareholders is a small victory for Marconi, which had argued strongly throughout the process that in the interests of continuity and liquidity shareholders should be given a symbolic stake in the group. Creditors, who are collectively likely to have to write off billions of pounds in debt, wanted to leave shareholders empty-handed.

To: David Hansen who wrote (122)	12/17/2002 4:59:59 AM
From: elmatador	Respond to of 129

Marconi FT.com site; Dec 16, 2002 Marconi: The Sequel bears too many of the hallmarks of its predecessor for comfort. Shareholders, long superceded by the creditors, have now passed the baton to debt holders via a debt-for-equity swap. For the remaining equity holders, it would take more than nine shares (which peaked at £12.50) just to buy a second-class stamp. But bondholders cannot afford to be smug - especially if their portfolios contain other Marconi lookalikes. The company they have inherited boasts an implied enterprise value of more than £10bn (just one-twentieth of which is its market capitalisation), or about 10 times sales. That compares with an EV/sales ratio of two times for Nokia. The sins of Marconi are all too widespread, especially within the telecoms and telecoms equipment sectors. State-held France Telecom, because of government unwillingness to see its stake diluted, also opted to fund acquisitions with cash rather than paper - never a good idea during a bubble. What has been learnt? Even at Marconi, rather less than might have been hoped. Telecoms experience is conspicuous by its absence among the new management line-up. Equally widespread is Marconi's inability to predict break-even sales levels: an especially worrisome problem when top-line growth is in such short supply. Marconi has, again, revised down its core operating costs to meet the crimped new sales expectations - proof, if more were needed, that break-even numbers in restructuring stories are not watertight. This is a timely reminder for investers in the likes of Alcatel, Ericsson and, perhaps most glaringly of all, Cable and Wireless. The latter also appears to have missed the Marconi how-not-to masterclass on timely dissemination of information to investors. Many more skipped the one on realising maximum break-up value rather than fire sale prices. That is a pity: the demise of an industrial icon should at least leave a legacy of showing others where not to tread.

To: David Hansen who wrote (122)	5/19/2003 11:17:16 PM
From: elmatador	Respond to of 129

What's Next for Marconi? May 16, 2003 After 18 months off the public markets Marconi plc will return to the London Stock Exchange <http://www.londonstockexchange.com> on Monday, May 19 (see Marconi Updates on Restructuring <http://www.lightreading.com/document.asp?doc_id=33922> ). Industry eyes will fix on the newly reborn company, eager to see how it will fare and how its new status will affect the telecom market. Marconi was put back on the rails of public trading when its restructuring plan was recently approved by its creditors (see Marconi Creditors OK Restructuring <http://www.lightreading.com/document.asp?doc_id=32129> ). After opening on the London exchange, it plans to relist on Nasdaq <http://www.nasdaq.com> later this summer. The company's reshaping has been one of the downturn's most complex, involving a series of terms for repayment that defy the comprehension of those not adept at finance (see Marconi Details Restructuring <http://www.lightreading.com/document.asp?doc_id=29854> ). Bottom line, though, is that when the company resurfaces as Marconi Corp. on Monday, it will have about £788 million (US$1.3 billion) in debt, down from about £3.9 billion ($6.3 billion), and previous shareholders will own just about 0.5 percent of the equity. That means a fresh start for Marconi. But where does it go from here? Reaction to the news of Marconi's return is likely to be mixed. For customers, the effect could be nil. After all, the entire sector is suffering from a spending famine, and one vendor's return to public trading won't change that. Competitors are apt to be negative: Those who've used Marconi's restructuring woes against them in sales calls are losing that lever. Some larger players, such as Alcatel SA, Lucent Technologies Inc., and Nortel Networks Corp. are apt to view Marconi's debt-reduced status as unfair, in light of the struggles they continue to face without the benefit of a bankruptcy restructuring. Others may see Marconi's emergence as an opportunity. With 80 percent less debt and the prospect of new public funding, Marconi's status as a prospective partner (see Marconi and Laurel in Talks <http://www.lightreading.com/document.asp?doc_id=33551>) or as an acquisition could rise considerably. Consider this: Marconi remains a leading player in the SDH <http://www.lightreading.com/document.asp?doc_id=4432> equipment market, particularly in Europe. For the fiscal year that ended in March 2003, the vendor made about 26 percent, £439 million (about $713 million), of its core business sales of £1.131 billion (about $1.8 billion) from optical networking (mostly SDH) multiplexing equipment. About 60 percent of that revenue came from sales in Europe, the Middle East, and Africa. Marconi's share of the SDH market remains strong, though it's drooped a bit in the past year. Figures from KMI Corp. <http://www.kmicorp.com> show that in 2002, Marconi ranked second in SDH market share. Its gear represented 16 percent of worldwide SDH sales of $3.858 billion. In 2001, Marconi ranked first, but was shouldered into second place by Alcatel, which has 17 percent worldwide share. Siemens ranked third, with 13 percent. Table 1: Marconi Core Business Revenues for fiscal year ended March 2003 Equipment UK£million US$million Optical networking £439 $713 Broadband routing and switching £142 $231 European access £258 $419 North American access £95 $154 Outside plant/power £140 $227 Other network equipment £57 $93 Total £1,131 $1,838 Services Installation, commissioning, and maintenance £370 $601 Value-added services £373 $606 Total £743 $1,207 Source: Marconi There are at least three companies that may wish to lay hands on that SDH moolah. One is Cisco Systems Inc., which has declared its ambitions to make deeper inroads into the SDH market (see Cisco (Re)Launches SDH Push <http://www.lightreading.com/document.asp?doc_id=29626> ). Another is LM Ericsson, which probably doesn't want to lose its longstanding OEM agreement for SDH gear from Marconi, particularly given Ericsson's present walking-wounded status. Then there's Siemens AG; Frankfurt: SIE), which could use more SDH customers to tighten its hold on the segment. One analyst sees yet another scenario: "Buying Marconi cheaply might give an Asian vendor a key presence in Europe," says Richard Webb of Infonetics Research Inc. <http://www.infonetics.com> He notes that Huawei Technologies Co. Ltd. <http://www.huawei.com> has been looking to build a European customer base. Anyone purchasing Marconi would have to consider that it's still got some downsides. It's aiming to sell its North American access and outside plant/power businesses eventually. It's got a ho-hum record with its other products, notably its multiservice switches and DWDM gear. And it's playing catchup in the DSLAM and softswitch market (although that's not how CEO Mike Parton sees it -- see Mike Parton, Marconi <http://www.lightreading.com/document.asp?doc_id=29710> ). Though Marconi continues to hold its own with big carriers like Telecom Italia SpA and Telstra Corp., it's lost some ground elsewhere -- most notably at British Telecommunications plc (BT); London: BTA), where it seems to have given way to Ciena Corp. on a bigg IP/MPLS buildout (see Ciena's BT Coup: How Big? Still, Marconi's SDH share is clearly a bit of ammo with which a partner or acquirer could face Alcatel -- the gorilla looming in the SDH mists. According to KMI analyst Michael Arden, Alcatel went from second to first place in 20002 by adding next-generation intelligence to its SDH gear (see Alcatel Spruces Up SDH Box <http://www.lightreading.com/document.asp?doc_id=31464> ). Marconi spokesman Joe Kelly says the company's not focused on any potential mergers. While he doesn't know of any clause in Marconi's Byzantine restructuring agreement that would preclude a buyer making an offer, he says it's not in the corporate consciousness at the moment: "We're focused exclusively on relisting, rebuilding, and maintaining our progress." - Mary Jander, Senior Editor, Light Reading <http://www.lightreading.com>