As Alcatel-Lucent (NYSE: ALU) struggles to find a way to become profitable, analysts believe that the patent portfolio, which is estimated to be worth $9 billion--a sum that, interestingly, is more than the estimated $7.8 billion value of the company itself.
According to a Bloomberg report citing research from MKM Partners LP, Alcatel-Lucent's patents might be worth twice as much as the $4.5 billion Nortel Networks got for its patents in a June bankruptcy auction.
"The patent portfolio is one of the hidden assets of value that I don't think investors have paid much attention to," Alkesh Shah, an analyst at Evercore said, adding that investors interested in the company should be "looking at the next piece, which is a very large patent portfolio that has actual value that's being undervalued by the public market."
Alcatel-Lucent suffered a blow in its efforts to become profitable for the first time since acquiring the former Lucent in 2006, when its Q2 2011 sales of $5.6 billion failed to meet analysts' expectations.
In addition to the patent portfolio, Alcatel-Lucent is examining what to do with its less profitable enterprise business. A number of people close to the situation believe that a sale of the unit or an IPO could fetch €1.5 billion ($2.1 billion).
- Bloomberg has this article
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