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Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: Willie C. who wrote (3315)	8/26/1998 8:51:00 AM
From: growthvalue	Read Replies (3) \| Respond to of 7342

T does not own any LU. It was completely spun off.

To: Willie C. who wrote (3315)	8/26/1998 9:11:00 PM
From: JMD	Read Replies (1) \| Respond to of 7342

Willie C., I wish I had answers as eloquent as the questions you posed, or any answers at all for that matter. Although my background is finance and when I went to biz-school "business ethics" courses were non-existent, the issues you raised are certainly paramount today. Of course you are aware of the basic issues of corporate governance: the board of directors, elected by the shareholders as their representatives, are supposed to ride herd on management, who in turn have an obligation to maximize shareholder value. In practice, the board exercises its power primarily, though not exclusively, by way of hiring and firing the CEO. In the modern era, things ain't quite so simple. The key buzz word / phrase being: multiple constituencies. "Wait a minute" say the employees of the enterprise, what about us? Ditto: "the community in which the enterprise is located", "vendors" and so on. The net being: doesn't management have some on-going obligations to each and every one of the above? And clearly, the potentials for conflict are rife: if we give all the employees a month vacation, are we maximizing shareholder value? Well, yes if it cuts turnover; but, no if we were in no danger of losing them anyway. You get the idea. To return to your specific question: T would have to demonstrate to its shareholders that vaporizing CIEN as a supplier was to their ultimate benefit. I would love to see that rationalization, er, excuse me, argument. I will politely suggest that the break-up fee issue you raise does not belong in this category [i.e., the conflicted management trying to serve multiple masters]. An acquirer has a legitimate interest in seeing to it that its due diligence costs, at a minimum, are not squandered. Further, by putting a company "in play", the acquirer has typically pumped the target's stock price to a substantial premium and if the White Knight rides by and is willing to pay the break-up fee AND boost the bid, well, happy days for the target's shareholders. I hope Dave Anderson's observation " that we will never know the full story" does not come to pass. And given the class action filed today, I suspect it will not. Let me repeat that there are no terrific answers to your terrific questions, or at least not in my bag of tricks. I will only say that both LU and T have more questions to answer than Bill C. [okay, that may be a slight exaggeration] but at the end of the day both will have to justify why their timing/interference with the TLAB/CIEN deal happened to hit on the day of the shareholders meeting (how long had T been putting CIEN's stuff through the lab paces?) and, as to T, why eliminating a supplier is in the best interests of ANY of the constituencies that T's management is accountable to? Including, most graphically, those of CIEN/TLAB shareholders. Many billions just went up in smoke and the class action today may be the first of a couple. Please accept my apologies in advance for such a long-winded reply that got neither of us any further down the road figuring this "morality play" out! Best Regards, Mike Doyle