Do you miss big IPOs? Lucent Technologies Inc. does. The offering of Lucent's microelectronics spinoff Agere Inc. might be worth up to US$7.4 billion. Even conservative estimates ($6.48 billion) place it as the second-biggest US IPO, after AT&T Wireless Services Inc.'s offering last year. If Cisco Systems Inc. can break its winning streak, maybe Lucent can drag itself out of the gutter.
That $7.4 billion is almost half of Lucent's entire value, said the Financial Times, and Agere's value still makes up a big chunk of Lucent's market cap. "Lucent hopes the IPO will boost its finances at a time when it is facing negative cash flow from its operations," said the FT, which quoted an analyst who added, "They really do need the cash."
Agere would get a slice, of course, to the tune of $3.75 billion. Morgan Stanley would get some, too. Then again, those big numbers may shrink by the time the IPO actually happens. "If Agere cuts the price of its IPO during the next few weeks, it will simply be following nearly every other company, large or small, that has tried to price an IPO in this market," wrote The Wall Street Journal's Raymond Hennessey. Or, as one analyst informed Reuters, "I'm guessing that they wished to God they had done this last year."
Agere is based in the technology hotbed of . . . Allentown, Pennsylvania. The Lehigh Valley Morning Call beamed with pride. "More important than the money is the clout Agere will add to the Lehigh Valley's reputation as an emerging high-tech hot spot," wrote the Morning Call's Christian Berg, citing "local experts." ("More important" is debatable, but it does sound like the region's business development could use a lift.) For instance, employees who move to the area to work for Agere may start their own companies later, as some already have. One such entrepreneur said of Agere, "There are few other technology companies of the same caliber." For Lucent's sake, we hope he's right.