Lucent Technologies Inc. said its shareholders have given the vendor the go-ahead to adopt a reverse stock split with a view to boosting its share price.
It is the third consecutive year shareholders have approved a reverse stock split, but the U.S.-based vendor has never implemented the split.
Since the telecom bubble shook the market about four years ago, Lucent has been weighing the reverse stock split option to keep its share price from falling below the $1 mark, which might invite delisting by the New York Stock Exchange.
Lucent is not the only wireless company to consider this option. Nortel Networks Ltd. and L.M. Ericsson also enjoyed shareholder approvals for reverse stock splits and implemented them.
Lucent’s share price has hovered around $3, a far cry form its sturdy $85 in the prosperous days of 1999.
The company said the reverse stock split will enable it to return “our share price to a level of share prices of other widely owned public companies.”
Analysts think the decision follows concerns that the market may not witness a bounce in the near future.
