Agere's Fistful of Dollars

Agere Systems, the Lucent Technologies Inc. (NYSE: LU) optical component spinoff that has tenaciously insisted on going public in the teeth of the bear market, finally priced its IPO last night at $6 per share.

After making its public debut on the New York Stock Exchange, shares of Agere rose nine cents (1.50%) to 6.09 in late afternoon trading.

The pricing comes after several downward adjustments to the offering (see Agere Sets Pricing Date and Range and Agere Delays IPO and Reduces Offering). The IPO raised $3.6 billion for Agere, about half of what it had hoped to raise when it first filed to go public.

Despite the brutal market, the company needed to complete the IPO in order to finance the spinoff and alleviate some of the debt that it inherited from parent company Lucent.

Last week, Morgan Stanley Dean Witter, the lead underwriter on the Agere deal, changed the number of shares offered from 500 million to 600 million. It also reduced the price of those shares from a range of between $12 and $14 a share to between $6 and $7.

It also appears that Agere's string of bad luck isn't quite over. This morning, Nasdaq opened deep in the red after last night's gloomy warning from Nortel Networks Corp. (NYSE/Toronto: NT), a Lucent and Agere competitor, which said the company's quarterly results would fall short of previous guidance. Agere then issued its own warning, saying the company expected a significant operating loss in 2001.

-- R. Scott Raynovich, executive editor,Light Reading http://www.lightreading.com
rafaelg 12/4/2012 | 8:39:33 PM
re: Agere's Fistful of Dollars Agere was doing so well!!

Agere will inherit 2.5B in LU debt. And the same management that drives LU...

What a waste!!!

I am glad I am not getting a paycheck from LU anymore...
luxPath 12/4/2012 | 8:39:25 PM
re: Agere's Fistful of Dollars Any thoughts on Agere as a company?....as employer, supplier etc.

How about its network processors, ICs, optical components? Quality and capabilities vs. those of JDSU, Intel and IBM Microelectronics.

Does Agere have competencies in SiGe, silicon-on-insulator and other materials science and other innovative fab techniques?

bongwang 12/4/2012 | 8:38:59 PM
re: Agere's Fistful of Dollars Well rafaelg, I agree. I'm glad you aren't getting a check there anymore.

Agere is so un-LU it's amazing. Yes they have the debt, no they don't have LU management. They have been profitable until just recently and that is because their customers have slowed spending(throughtout the industry, not just from Agere). They have a nice product portfolio with a tight focus on communications. Their ICs are first class for BB networking, and their Optoelectronics group is way out ahead in production capability. When the communications market opens up again, I believe Agere will be right there.

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