Lucent Technologies - Lucent Spun Off From At&t

LUCENT SPUN OFF FROM AT&T

Lucent was incorporated in November 1995 in the wake of AT&T's restructuring. AT&T sold 17.6 percent of Lucent to the public on April 10, 1996. The $3 billion initial public offering was the largest U.S. history. The remaining 82.4 percent of Lucent was distributed to AT&T shareholders later in 1996. Lucent is the corporate descendant of AT&T's Western Electric manufacturing division that AT&T bought in 1881. Bell Laboratories was also made part of Lucent. Bell Laboratories is known as the inventor of the transistor, the communications satellite, the laser, the cellular phone, and electronic telephone switching. From the time it was founded until the time it was incorporated into Lucent, Bell Laboratories averaged one patent a day.

In its first nine months as a public company, Lucent reported revenue of $15.9 billion. From 1997 to 1999 Lucent spent $32 billion on some 30 acquisitions. Its largest acquisition during this period was Ascend Communications in 1999 for more than $21 billion. Ascend was the leading manufacturer of ATM switches that were used by telephone carriers to link old voice circuits with new data lines. In 1999 Lucent also spent $1.5 billion to acquire Excel Switching Corp., which made telecommunications network switching products, and $1.5 billion on Kenan Systems Corp., which made customer service software.

In 1999 the company realigned its businesses into four main operating groups in addition to Bell Labs. Service Provider Networks consisted of optical networking, switching and access solutions, wireless networks, and communications software, plus businesses focused on serving cable TV operators and other service providers. Enterprise Networks was responsible for voice and data solutions for business and government enterprises. NetworkCare Professional Services offered a complete range of network services, including planning, design, implementation, operations, maintenance, education, and software. Lucent's Microelectronics and Communications Technologies group included the company's microelectronics business, network products, new ventures, and intellectual property. Its products included integrated circuits, optoelectronic components, power systems, optical fiber, cable, and connectivity solutions.

For much of its history Lucent's stock was popular with investors. From the time of its IPO in 1996 to the end of 1999, its stock increased in value 11 times, or 1,100 percent. With 4.6 million shareholders, Lucent became America's most widely held stock, surpassing AT&T in that regard. Like other technology companies, though, Lucent was affected by the stock market's volatility. When the company's first quarter results for fiscal 2000 fell short of analysts' expectations, its stock lost 28 percent of its value in one day, January 5, 2000.