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From: iabramov75@yahoo.com
Date: 11/14/2007
Time: 2:27:04 PM
Remote Name: 24.90.141.141
In December of 2004 Lucent issued 200 million warrants with a strike price of 2.75. The warrants were issued in connection with the securities litigation settlement. Each warrant upon exercise would be exchanged for 1 share of Lucent stock. In December 2006 Lucent was merged into Alcatel Lucent and Lucent shareholders got .1952 of Alcatel Adr's (symbol ALU) for each Lucent share that they held. Same exchange ratio applies to both the 199+ million warrants that haven't been exercised and the strike price of the warrants. Thus 199+ million shares upon exercise would be exchanged for roughly 39 million shares (ALU). The new strike price as per the exchange ratio of .1952 is 14.09 The warrants (LUTHW.PK) are currently trading at .001 and are set to expire on December 10, 2007. Thus, the warrants will not get exercised as the stock is currently trading at 8.59, well below the 14.09 (2.75 in lucent terms) strike price. As per form F-3ASR filed on November 30, 2006 the company will receive gross proceeds from the exercise of the warrants (199,323,110 * 2.75) = $548,211,903. See p.24 at http://esignal.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingCONVPDF1?SessionID=YVEJW0Qo0oaRAN0&ID=4797668 39 million shares that would have to be issued represents less than 2% of the 2.3+ billion outstanding shares. Isn’t it therefore in the company’s best interest to extend the expiration of these warrants by at least a year or more, so that if the underlying stock rises above 14.09 (strike price) the company will make significant amount of money? Am I missing or misinterpreting something?