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Non-Tech : Bill Wexler's Dog Pound -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (8610)	1/23/2003 12:27:24 AM
From: Pink Minion	Read Replies (1) \| Respond to of 10293

Hyping LU now? Here's what Beavis says: thestreet.com Lucent Crunches Debt at Equity's Expense By James J. Cramer 01/22/2003 02:23 PM EST Click here for more stories by James J. Cramer Read More Click here for the latest from James J. Cramer Lucent (LU:NYSE - news - commentary - research - analysis) issues 388 million shares to buy back debt. Well, excuse me, but what Lucent's really doing, in my opinion, is managing a bankruptcy reorganization without filing a reorganization. Not only that, but it is ongoing. I didn't hear anything on today's Lucent call that makes me feel good about the company or feel its current viability has improved. What I can argue, though, is that Lucent has a lot more common stock to issue because it has too much debt, way too much debt. And it doesn't have enough orders to make me feel confident, because the big phone companies still aren't buying. Wireline spending in particular is continuing to dry up, although wireless spending still grows -- although at a much slower rate than during the heyday. Make no mistake about it, I think Lucent has done the impossible by shrinking this company on the fly almost as fast as its own market is shrinking. But if it is going to get out of this hole for good, I believe it will have to issue a ton more stock to pay down debt. That's kind of what happens in bankruptcy, a crunching of the debt for equity. That's terrific if you own debt. It's not so hot if you own equity. This massive issuance of stock isn't going to get better anytime soon. More stock must be issued for pensions. More stock must be issued if things don't get better, and probably quickly. Would I buy Lucent off this quarter? Why? Would I sell it? Why not? There are certainly better plays out there and the lack of guidance makes me worried that nothing really has gotten any better here, at all. Sorry. Random musings: If you want a portfolio of high dividend-yielding stocks with an eye toward the president's plan, we've put one together for you. It is called The Save Safe Plan and I heartily recommend you take a look at it. Some terrific ideas, just terrific, are included in the package. Timely, too!