Lucent, Alcatel Talk Merger

Disappointment has been a fact of life for Lucent shareholders, who saw their dreams of a revival shattered in January when the company previewed a sales miss in both the first quarter and full-year. It cited weakness both at home and in China.

Between Lucent and Alcatel, Lucent is the smaller in terms of revenue. For the fiscal year ended Sept. 30, the company had $9.44 billion. Alcatel's 2005 sales were about $15.7 billion. Previous merger talks between the two companies broke off in 2001 over the issue of who would control the company following the transaction.

The deal could also face a thorny regulatory landscape. France hasn't historically welcomed linkups with U.S. firms, and nationalist issues have occasionally turned up in the telecom space, where voice and data transmission sometimes broaches privacy concerns.

Checkered Past

AT&T spun off Lucent in 1996, and as the world became more connected and dependent on the communications industry, demand for its offerings soared.

Like many companies involved in the quest to network the planet -- the JDSUs (JDSU Quote), Ciscos (CSCO Quote) and Nortels (NT Quote) -- Lucent saw its shares skyrocket and grow to be widely held by both institutional and retail investors.

For a time, Lucent was the most-owned stock in the U.S., and it's still regularly among the heaviest-traded at the New York Stock Exchange.

When the Internet party came to its end, Lucent's fortunes tracked so many of its contemporaries: profit warnings piled up, its share price tumbled, thousands of employees were axed and stockholders hit it with lawsuits to try to recapture some of the billions they had lost.

At its zenith, Lucent fetched more than $60 a share, adjusted for stock splits and dividends. At its worst, the stock sold for less than $1 in 2002.

From late that year to the present day, the stock has essentially been mired between a dollar and change and $4; it hasn't seen a double-digit price tag since 2001. Shares of Lucent closed Thursday at $2.82, and Alcatel finished at $15.45.