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Avaya Shares Struggle, Closing Down 12%

October 03, 2000|Reuters

Being associated with Lucent Technologies isn't such a great thing in the stock market these days.

Shares in corporate telecommunications firm Avaya Inc. lost about 12% Monday as they began trading as a spinoff from Lucent.

Avaya, which offers communications networks to corporations and government agencies, opened at $22.88 on the NYSE, then fell as low as $19.25. The shares (AV) closed at $20.19.

Lucent, the world's biggest telecommunications-equipment maker, spun off the $8-billion enterprise networks unit so it could focus on its faster-growing optical, data networking and wireless businesses.

Avaya has had flat to negative growth in recent quarters, when it was part of Lucent. But Avaya Chairman Henry Schacht said the spinoff should unleash the same strong growth that Lucent had after it was spun off from AT&T Corp. in 1996.

"This is the same sort of scenario as at Lucent," he told Reuters.

In the spinoff, Lucent shareholders got one Avaya common share for every 12 Lucent shares.

Lucent shares (LU), badly depressed this year by the company's earnings woes, rallied Monday, gaining $2.41 to $31.

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