A large chunk of AT&T; broke off Thursday, becoming Lucent Technologies Inc. and setting off an investor stampede for a stake in the biggest initial public offering of a U.S. company.
Investors pushed Lucent’s value up 13 percent, proof not only of interest in the growing communications equipment industry but a strong stock market.
Lucent’s 112 million shares were initially priced at $27 each, making the total offering worth $3.02 billion. Lucent’s stock reached $32 in the morning but drifted lower through the day to close at $30.62-1/2. It was the most active issue on the New York Stock Exchange. AT&T; stock closed down $1.25 to $62.87-1/2, also on NYSE.
“It’s very impressive that a deal of this size could take place without really hurting the rest of the market for new stocks,” said Ryan Jacob, director of research at IPO Value Monitor. “It’s a testament to how strong the market is right now.”
The previous largest IPO was Allstate Corp., the insurance company spun off from Sears, Roebuck & Co. in a $2.1 billion stock offering three years ago.
Lucent accounted for $21.4 billion of AT&T; Corp.’s $79.6 billion in revenue last year. It emerges as one of the nation’s 50 largest industrial companies and the second-largest communications manufacturer after Motorola Inc. It also is the dominant manufacturer of telephones and network switches in the United States.
The break is the first of two to occur this year at AT&T.; The company plans to also spin off its $8 billion computer manufacturing business, NCR Corp.
AT&T; has said it would cut 40,000 jobs during the breakup. About 22,000 of those are in Lucent’s operations.
The company’s underwriters, led by Morgan Stanley and Goldman Sachs, had not been expected to take it public until next week. But interest in the stock was heavy with institutional buyers lined up four to five deep for each share.