Should Investors Love Alcatel-Lucent's New Financing?

The last six months have seen spectacular returns for investors in French-American telecom equipment giant Alcatel-Lucent (NYSE: ALU  )

ALU Chart

ALU data by YCharts.

After being effectively priced for bankruptcy and seeing its share price sink all the way to $1 a share, Alcatel-Lucent has since proven it won't go down without a fight.

Alcatel-Lucent's attempt to engineer a major comeback in the brutally competitive telecom equipment space has certainly come with its fair share of costs. To its credit, Alcatel-Lucent realized it simply needed to grow more efficiently if it were to survive. However, seeking out those efficiencies has come in the form a several brutal rounds of layoffs and cost reductions for Alcatel-Lucent.

The company has also made major strides to improve its balance sheet. Alcatel-Lucent received a critical round of financing from a consortium of lenders led by Goldman Sachs and Credit Suisse in 2012 that bought Alcatel some much-needed times. Alcatel-Lucent recently made waves by announcing it would seek a fresh round of financing, both debt and equity, as it attempts to further solidify its balance sheet.

In this video, tech and telecom analyst Andrew Tonner talks about the controversial move for Alcatel-Lucent and how long-term investors should interpret this recent news.

Investing where the growth is
Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2719662, ~/Articles/ArticleHandler.aspx, 7/30/2014 6:24:32 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement