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Lucent Denies Bankruptcy Rumors Shares Plunge Before Company Issues a Denial

(NEW YORK) (WCBS) Shares of Lucent Technologies Inc. plunged as much as 30 percent Wednesday before the struggling maker of telecommunications equipment strongly denied rumors that it plans to file for Chapter 11 bankruptcy reorganization.

"Chapter 11 rumors are absolutely false," said Bill Price, director of corporate media relations at the Murray Hill-based company. “They are ridiculous and (are) pushing people into a panic that does not exist."

The market rumors helped send Lucent's already battered stock plummeting, before it recovered somewhat after the company issued its denial. In heavy trading on the New York Stock Exchange, shares of Lucent were off 45 cents, or 6 percent to $7.40.

Lucent's early drop to as low as $5.50 briefly pushed the stock to an all-time low since the company's spinoff from AT&T Corp. in April 1996. In the initial public offering, the stock debuted at the equivalent of $6.38 per share, adjusted for two stock splits and the recent spinoff of Lucent's telephone-making business, now called Avaya.

The latest downturn for the stock, among the most widely held in the country and long a favorite of analysts, follows a string of strategic missteps and profit disappointments.

In the fall, Chief Executive Rich McGinn as fired and replaced with former CEO Henry Schacht in an effort to get the telecommunications-equipment maker back on track.

The current stock price is less than 10 percent of Lucent's $84 high in December 1999.

In January, Lucent announced plans to eliminate about 10,000 of its 123,000 jobs worldwide through layoffs and attrition, and to remove another 6,000 from its payroll by selling operations at two plants to contract manufacturers, in an attempt to restore profitability.

"We have the financial flexibility to execute our turnaround," Price said. "Nothing has changed."

http://cbsnewyork.com/finance/StoryFolder/story_1762636251_html/index_html

-- K (infosurf@yahoo.com), April 06, 2001