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

To: yard_man who wrote (4905)	11/3/1998 5:57:00 PM
From: Haim R. Branisteanu	Respond to of 21876

tippt keep in mind that LU is a momentum stock and fundamentals do not matter. LU is a great company but it is also grossly overpriced. Still, like DELL, the "mad dogs" and "empty heads" are still pushing the higher. LU will crash only around earnings announcements. The October phenomen was due to the geeks buying on margin and as the stock dropped the margin calls just came in <ggggg> Premium on option is relative low so I am trying to close my long and short option position.Implied volatility around 37%. Still short LUWP and long 1/2 position LUKQ, which I will close tomorrow. BWDIK Haim

To: yard_man who wrote (4905)	11/4/1998 11:24:00 AM
From: Thomas M.	Read Replies (3) \| Respond to of 21876

"While rumors swirl about what Lucent may do in the U.S., the company's real future lies in global expansion." Disruptions Help Us By Scott Woolley THE WALL STREET BUZZ on Lucent Technologies these days is all about what big data-communications company it may soon buy. Rumored targets include AscendCommunications and 3Com. This to better take on Cisco Systems in networking gear as voice and data converge in a huge telecommunications market. But while the headlines focus on what the $30 billion (worldwide sales) Lucent may do in the U.S., the real action for Lucent is overseas. Its goal is to become a major player in no fewer than 55 countries. The stakes are huge. The worldwide market for the stuff Lucent sells was $380 billion last year. The company figures that number will hit $650 billion by 2001, a 71% rise in four years. Lucent's chief executive, Richard McGinn—who joined AT&T as a salesman in 1969—hopes to capture a big chunk of that increase. He's on his way. Last-quarter overseas sales—which account for one-fourth of total sales—were up 41%. Domestically, they rose just 17%. Although McGinn won't give a firm target for international sales growth, he says the majority of Lucent's opportunity lies outside the U.S. McGinn's timing is very good. Traditionally foreign suppliers like the French giant Alcatel or government-owned entities such as Japan's NTT once had a stranglehold on local markets. No more. Thanks to a wave of deregulation, there are more than 1,000 new overseas phone companies, all hungry for the latest equipment. International long distance tariffs are being driven down courtesy of a new World Trade Organization agreement. Formerly state-owned telephone monopolies—Germany's Deutsche Telekom, Japan's NTT, Brazil's Telebras— must contend with upstart competition. Daniel Stanzione, Lucent's chief operating officer, puts it this way: "Disruptions help us." In Spain full telecommunications competition is scheduled to begin Dec. 1. Lucent recently completed a $45 million long distance network for Retevision, a small competitor looking to take on Spain's version of AT&T, the giant Telefonica S.A. But Telefonica, a sleepy monopoly no more, is a much larger potential customer for Lucent. And not just in Spain, where it needs the latest equipment to keep pace with Retevision and others. Telefonica just won numerous bids to provide cellular and wired phone service in Brazil. Of the $4 billion it intends to dole out in contracts over the next four years, Lucent is likely to win a big share. "In any market where an incumbent begins to face competition we have an opportunity to challenge their relationship with their existing supplier," says Stanzione. And in most cases the company can sell to both sides. Might Telefonica get irked at Lucent's aid to Retevision? "That underestimates the maturity of the company's leadership," scoffs Bernardus Verwaayen, who runs Lucent's international operations. In the last two years 100 competitive carriers have sprung up in Germany. Twenty have purchased Lucent equipment. And since newly privatized Deutsche Telekom is no longer run by government bureaucrats, there is less pressure to award contracts to Germany's biggest native telecom equipment maker, Siemens. Last year Deutsche Telekom spent $110 million in wireless systems alone with Lucent, whose German operations are overseen by Hans Huber, a former Deutsche Telekom executive. "The incumbent carriers have a totally new attitude," says Eric van Amerongen, a former Alcatel executive who oversees Lucent's European operations. "They used to be an instrument of industrial policy," he says. "Now they care about quality, cost and speed." All of which help explain why Lucent's net, before special charges, increased 52% to $2.3 billion in the Sept. 30, 1998 fiscal year. In many ways the international markets are mirror images of the one in the U.S. Here, Lucent's equipment pervades existing networks, a relic of its days as the in-house supplier of AT&T. From AT&T to Bell Atlantic to GTE, Lucent has the inside track, since its equipment—and, perhaps more important, its hugely complicated software—is already embedded in the network. Overseas, Lucent is the one trying to horn in on established relationships. Stanzione recalls a trip to Brazil when the communications minister left him cooling his heels after their scheduled meeting time. The reason for the delay? The minister was attending a party celebrating the 75th anniversary of Ericsson in Brazil. Lucent, the new kid on the block, obviously didn't warrant the same attention. What about the world economic turmoil? McGinn professes little worry. In battered Asia he sees the market growing at 16% annually for the next three years, buoyed by China. Lucent will grow even faster than that, he claims. Despite the damage to Brazil's economy from high interest rates and the threat of currency devaluation, McGinn expects the Latin American market to grow by 20% annually for the next three years. He could be upstaged by Ericsson and still do pretty well.