LUCENT

Lucent! How did I miss this bow-wow? I probably never considered it because it was too "safe", not sexy enough. Well, turns out the big, safe companies are not so invulnerable to market forces after all. That is why I think it's wrong to harrass Microsoft, Intel, etc.

Those companies are constantly faced with dynamite competition. They can go under from market forces at any time. In the meanwhile they just keep reinventing their products every few years. Bill Gates, your billions don't bother me a bit. More power to you. Revenge of the nerds!

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Wednesday February 14, 7:52 am Eastern Time

TheStreet.com

Looking at Lucent? Lotsa Luck to Ya

By James J. Cramer

Lucent (NYSE: LU - news) may not have the horses to get out of this jam. That's the word from many of you who reacted to my article last week about the possibility that there might be some bottom to the Jersey Giant. A wave of Lucent emigres, as well as some current folks in the ranks, told me that so much of the good of Lucent has been gutted or given away that there may not be enough there to make the enterprise viable. I was willing to dismiss these naysayers until I read an article in this weekend's Philadelphia Inquirer that pretty much set me straight. The Inquirer profiled a little start-up called Cenix, which hopes to automate many of the more tedious, laborious aspects of fiber optics.

We have long known that the precision with which these companies must work has led to high labor costs and inefficiencies that have felled all but a handful of great companies.

Cenix creates cards, or interfaces, that generate better laser transmissions with far less heat. The result is a product that could revolutionize the way that fiber-optics companies do business.

What's this have to do with Lucent? Everything. The quintet of execs running Cenix all came from Lucent. They were with the optoelectronics division that will soon come public. They left, they told the reporter, because they wanted to be able to move faster and more flexibly than they could at Lucent.

Still, what kind of company lets guys like these, guys who make the whole thing bankable, go? How many others got discouraged and ran from Lucent? How many are planning to leave right now?

Lucent is in a competitive world, where other companies are inventing new technologies constantly. The stuff that the Cenix people are making might have been worth the whole value of Agere , the microelectronic division Lucent will be spinning out soon. Now it is getting funded by some venture capitalists from the Valley, including Vinod Khosla from Kleiner Perkins and will probably soon compete against Lucent!

These spinoffs and defections and balance sheet problems all make me feel as if you aren't getting much with Lucent once you are done. That means the stock goes up a couple if they name a good CEO and goes down a couple if they don't.

I don't need those kinds of odds. I am staying away.

-- Lars (larsguy@yahoo.com), February 15, 2001

Answers

LU, yahoo business

-- Lars (larsguy@yahoo.com), February 15, 2001.