Alcatel-Lucent, S.A. Message Board

If you own Lucent shares you may wonder why the
stock isn't skyrocketing and you may even be
considering selling the shares. At this point you must step
back and ask yourself a few questions.

- Why
isn't this stock moving?

The answer is simple -
Lucent missed their earnings.

- Why did they miss
their earnings?

I know the answer and will try
to explain in maybe oversimplified terms: Lucent is
constantly coming out with improvements and innovations in
their product lines. When customers see these
announcements, they are willing to wait for this latest
technology even though it may be a delay of a few quarters.
Unfortunately, for Lucent, some of these customers cancelled
existing orders for the slightly older technology in order
to wait for the latest and greatest. Lucent did NOT
lose these customers - the income is just delayed one
or two quarters in the fiscal year. That is why
Lucent maintains it will meet expected earnings for the
fiscal year.

- Why didn't Lucent anticipate this
and have manufacturing ramped up to produce the new
products?

This is difficult to explain but I have seen a change
in customer attitude and purchasing habits. It used
to be that no one wanted to be the guinea pig and be
the first to try a new product. They would wait until
someone else tried it and all the kinks were out of it
before they bought. Or, they would put it a small part
of their network and try it out before deploying it
throughout. This has all changed and the change has been very
recent. Now customers are clamoring for the latest from
Lucent. Their need for greater bandwidth and speed plus
their faith in the technology coming out of Lucent has
caused this change to occur and I feel it was very
difficult to anticipate.

But, what a position to be
in - The demand for your products is so great that
it is difficult to keep up!!

There is another
huge reason that you should not sell - the spinoff.
For every share you own you will get a share in the
new company which has solid, steady, albeit not
spectacular growth. All the business units are #1 or #2 in
the world. Plus you will get a share of the new
Lucent which is focused on fiber optics, wireless,
microelectronics, DSPs, internet infrastructure, optoelectronics
etc. The new Lucent will have 30% growth ( I believe
that is conservative!) and if they reach the same PE
ratio as their competitors, the stock price will be
unbelievable.

I will post a message 8 months from now (November
20, 2000) and will refer to this post and simply say
"I told you so".

Today is March 20, 2000 and
the price of Lucent stock (prior to spinoff) is $70.