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

To: Claude who wrote (3451)	7/31/1998 10:11:00 AM
From: Claude Edelson	Respond to of 21876

Claude, Lucent is waiting until October so that they can use the pooling of interests method of accounting. Such accounting does not create goodwill and a drag on future earnings that a merger accounted for under the purchase method (bay and nortel). In it is Lecent's best interest to keep their stock price high at least up until the acquisition so that the effectively get the best ration possible for their shares - For example, assume 1 share of lucent for .5 shares of another company at today's price. If lucent pice goes higher by october it may be 1 share of lucent for 1 share of the other company - in effect, Lucent gets a better deal. What does all this accounting jibberish mean - it means that at least through October I would expect Lucent's share to remain at this lower or go higher - not lower - i.e., why sell in July? Regards, Cje