What if you bought Lucent in 2000?
US Tech · Networks. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play0.0× · S&P 500 same money: $4,626
$1,000 in Lucent at the start of 2000 would be worth about $35.71 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
What happened: Lucent was absorbed by Alcatel in 2006.
The story
Lucent Technologies was spun off from AT&T in 1996 in what was then the biggest IPO in US history, taking with it Bell Labs, birthplace of the transistor and the laser. It sold equipment to telephone companies, and as the telecom boom gathered pace it became the most widely held stock in America, beloved by retirees who had received shares through AT&T. Its stock peaked at the end of 1999.
The boom had been partly self-financed. Lucent lent money to young telecom carriers so they could buy its equipment, and when those customers went bust, so did the revenue. The company also admitted to booking sales improperly, later settling with the SEC. Within three years the shares fell by about 98 percent, tens of thousands of jobs were cut and Bell Labs was dramatically scaled back. In 2006 Lucent merged with France's Alcatel, a combination that itself struggled and was bought by Nokia a decade later. For investors who bought in 2000, very little was left.
The lesson: Vendor financing can make sales look strong while quietly turning customers into debtors; Lucent's revenue disappeared once the borrowers it had funded collapsed.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2000 | $70.00 | $35.71 | $4,626 | 0.0× |
| 2003 | $1.50 | $1,667 | $7,727 | 1.7× |
| 2005 | $3.70 | $676 | $5,763 | 0.7× |
| 2007 | $2.50 | $1,000 | $4,789 | 1.0× |
| 2008 | $2.50 | $1,000 | $4,626 | 1.0× |
| 2010 | $2.50 | $1,000 | $6,071 | 1.0× |
| 2012 | $2.50 | $1,000 | $5,312 | 1.0× |
| 2015 | $2.50 | $1,000 | $3,301 | 1.0× |
| 2018 | $2.50 | $1,000 | $2,519 | 1.0× |
| 2020 | $2.50 | $1,000 | $2,092 | 1.0× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 2003, turning $1,000 into $1,667. The S&P 500 from that same year: $7,727.
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Lucent is one of 258 positions on the wheel — including the ones that went to zero.
Play Sixty-40More in US Tech
- What if you bought Apple?
- What if you bought Microsoft?
- What if you bought Amazon?
- What if you bought Nvidia?
- What if you bought Google / Alphabet?
- What if you bought Facebook / Meta?