Once the darling of wall street went down the wire post multiple failed restructuring attempts. Marlin Equity Partners are buying Tellabs in 891 million cash translated into $2.35 per share. The successful company Tellabs survived deep depression of 2001 and share traded at more than $50 whereas maintain $8- $9 during Telecom bust era. The continuous share repurchase program to keep share price at an attractive level impacted Tellabs dearly as they chocked down on research and development spending. Tellabs started feeling the pinch of misstep by 2011 and attempted to recover through multiple management realignment and product release but never managed to gain the confidence back from customer as well as investors. In most recent quarter they came out with 8 million loss as well as all financial KPI’s showed major downwards trends. Tellabs investors must be feeling cheated and it is clear with multiple lawsuits. The only learning one should have for investor that they must focus on organization management vision, research and development capabilities as well as shift of new product based on technology trend. Given the current technology trend many old gems may fall in the same route. In my point of view, every organization must learn from Sun Microsystem debacle. Even after having cutting edge technology and platform, it is more important to align business as per the industry trend rather than taking adamant self convincing approach. In industry “ My way or Highway never works”.
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