Northern, WI  11/26/2012 (BasicsMedia)  — Anyone who stayed long Alcatel -Lucent experienced one of the worst drops ever by a widely held Telecom stock as shares fell from $83 in August 2000 to $2 in August 2002 a 2 year drop which opened the doors to Sarbanes Oxley and many viewed there stocks as bulletproof.  There were many that Wall Street viewed as bulletproof names like Global Crossing (NASDAQ:GLBC) and Enron (NYSE:ENE) Enron which was named “America’s Most Innovative Company” by the magazine Fortune for six consecutive years, from 1996 to 2001. It was on the Fortune‘s “100 Best Companies to Work for in America” list during 2000, and had offices that were stunning in their opulence. Enron was hailed by many, including labor and the workforce, as an overall great company, praised for its large long-term pensions, benefits for its workers and extremely effective management until the exposure iof its corporate fraud. The first analyst to publicly disclose Enron’s financial flaws was Daniel Scotto, who during August 2001 issued a report entitled All Stressed-up… And No Place To Go, which encouraged investors to sell Enron stocks and bonds at any cost.

As was later discovered, many of Enron’s recorded assets and profits were inflated or even wholly fraudulent and nonexistent. One example of fraudulent records was during 1999 when Enron promised to repay Merrill Lynch & Co.‘s investment with interest in order to show profit on its books. Debts and losses were put into entities formed “offshore” that were not included in the company’s financial statements, and other sophisticated and arcane financial transactions between Enron and related companies were used to eliminate unprofitable entities from the company’s books.

Alcatel-Lucent (NYSE:ALA).  shares are trading sharply higher Friday on morning after Bloomberg reported that the cash-strapped telecommunications equipment vendor is in talks with Goldman Sachs (NYSE:GS) about a loan and it’s intersting to see these stocks rise form the ashes!!!. The story is attributed to “people familiar with the situation.”  The story notes that the company has been exploring a range of assets, including asset and patent sales and asset-backed financings. Bloomberg says that the Goldman deal would provide an undisclosed amount of cash, with Alcatel using some of its assets as collateral.

Bloomberg notes that the company is also considering the sale of some divisions, including a unit that makes undersea fiber-optic cable, and another that serves the enterprise market. The company has more than 2 billion Euros of debt maturing over the next three years.

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