Rumors continue to circulate about the fate of Lucent Technologies Inc. and its venture capital arms, Lucent Venture Partners (LVP) and the New Ventures Group. The problem is, no one, not even the folks at Lucent, seems to have their stories straight.
The speculation began after Lucent?s stock price, which once soared as high as $45, took an astonishing nose dive and finally hit an all-time low of $5.30 two months ago.
Since then, Lucent has been selling off its non-essential assets, ostensibly to stay afloat. Lucent?s stock finished up last Thursday at $6.39.
Given that the future of many corporate venture arms, including those at Comdisco Inc., Dell Computer Corp. and Hewlett Packard Co., currently hangs in the balance, some industry observers have discussed the possibility that Lucent?s VC groups also could eventually fall by the wayside, or be sold. Some published reports have indicated that
Lucent could fetch as much as $100 million if were to sell its venture arms.For its part, Lucent has been mum about its intentions, saying only that it is examining all parts of its business to determine where it can cut overall operating costs.
Even more baffling, at least one news organization falsely reported in late June that LVP was raising a third investment vehicle, which the company firmly denied.
Stranger still is the fact that LVP seems to be actively pursuing deals. In fact, it has made two new investments within the past couple of weeks.
Lucent participated in a $4 million Series A financing for Chilight Inc., an optical networking company developing a wavelength converter. As a result, LVP Partner Arie Litman is expected to join the Israel-based company?s board of directors.
Moreover, Lucent signed on as the only new investor in a $10 million Series B round for Haifa, Israel-based Mobilitec Inc., a developer of infrastructure platforms for cellular carriers.
Lucent?s contributions to both companies were undisclosed.
Affirming Lucent?s commitment to its venture arms, at least for the moment, company spokesman Bill Price said that while there will be “headcount reductions [at Lucent], there have been no announcements regarding the VCs.” Moreover, he said, LVP has closed four new investments since June 1, and has either completed or committed to 10 investments so far this year.
Very little has been said regarding what will happen to the New Ventures Group, however. Repeated phone calls to professionals there have gone unanswered.
At any rate, it is hardly a secret that Lucent is in the midst of its second phase of restructuring in an effort to return to profitability, which means trimming a total of $4 billion in annual operating costs. Whether its venture arms survive the bloodbath, however, still remains to be seen.
Contact Danielle Fugazy:Danielle.Fugazy@tfn.com