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

To: GVTucker who wrote (21025)	10/23/2002 3:43:11 PM
From: DiB	Respond to of 21876

Lucent buys back $275 mln of preferred shares biz.yahoo.com Wednesday October 23, 12:08 pm ET By Jonathan Stempel NEW YORK, Oct 23 (Reuters) - Lucent Technologies Inc. (NYSE:LU - News) said on Wednesday it bought back $275 million of its convertible preferred stock at far below face value, a move that might make it easier for the money-losing telecommunications equipment provider to manage its debt load. With its cash level shrinking, Lucent in the quarter ending Sept. 30 issued 58 million shares of new common stock in exchange for $175 million of its 8 percent convertible preferred stock maturing in 2031, Chief Financial Officer Frank d'Amelio said. He said Lucent later exchanged 38 million more common shares for an additional $100 million of preferred stock. "The current trading levels of these securities presented an opportunity to redeem them at well below their face value," he said on a conference call. "This is a prudent risk mitigation strategy. Considering the difficult market environment, we did not use any cash for these redemptions." D'Amelio said $1.6 billion of the preferred stock remains outstanding but declined to say if Lucent planned more buybacks. With customers spending less on its products, Lucent on Wednesday posted a $2.88 billion net loss in the latest quarter, its 10th straight quarterly loss. The company said it ended the quarter with $4.4 billion of cash, and expects to have more than $2 billion by next Sept. 30. It said it had about $6.8 billion of long- and short-term debt and convertible securities outstanding as of Sept. 30. Lucent may have to buy back the rest of the 8 percent preferred stock in August 2004 at face value for cash or common stock. Traders on Wednesday quoted the preferred stock at below 24 cents on the dollar. "The company needs to keep its debt position down," said Jeff Seidel, global head of convertible research at Credit Suisse First Boston. "If they chip away at the ultimate redemption amount and do negotiated buybacks at prices below where they might be redeemed, that's intelligent. Buying back preferred stock is probably the right thing to do."

To: GVTucker who wrote (21025)	10/23/2002 6:26:48 PM
From: KENNETH DOAN	Read Replies (1) \| Respond to of 21876

Covertable dilution. As a shareholder, do you want them to pay .24 on the dollars now or pay the full dollar now? there is a 2.8 billions(i think) that is due in june of 2003. So I expect more dilution ahead. I don't think it's smart to pay cash since there only be 2billions left by sep of 2003. My big concern is what the reverse split is going to do to share value. since only 1 out of 10 reverse split work the way that it was intend to do. Regards

To: GVTucker who wrote (21025)	10/24/2002 9:06:05 PM
From: bofp	Read Replies (1) \| Respond to of 21876

GV, Actually, only the management pension plan is underfunded, yielding the charge to equity. The larger pension plan for operating personnel remains significantly overfunded. While LU can not transfer the surplus from one plan to another, it is also important to note that LU will not be required to pay any cash into the underfunded plan for at least FY03 and probably FY04 as well. If we are concerned about cash balances and liquidity vis a vis bankruptcy, the pension plan is a non issue for the next two years. As far as the dilution already happening - au contraire. The degree of dilution will depend entirely on the price of a LU share at the time of the August 04 Put. If the price is still less than $1, the dilution is 4 times what it would be at a $4 conversion. This is why LU is buying in the convertable NOW. As to why the stock was up today - I would point to the SBC conference call, where CEO Ed Whitacre made a plea for regulatory relief, stating that LU and NT must survive for the future of US telecommunications. Sort of give me what I want, or I'll shoot this dog. Since FCC chairman Powell is on record as saying essentially the same thing, many investors are thinking that the trienniel review of UNE-P regulation will give the RBOCs relief. Also: Bloomberg reported that both VZ and BLS have given LU baselevel commitments for CY03, suggesting a reason for LU's confidence in the March quarter. There was also a hedgefund going extremely LONG LU for most of the day.