Mergers: JDS Uniphase 9B01B031

1. The "JDS" is short for Jones, Duck and Straus/Sinclair.
2. Engaged in acquisitions in the early 2000's in "all-stock" transactions.
3. It paid for overpriced acquisitions with its own overpriced stock
4. What did it actually lose? It wasn't all cash (only $6B or so)
5. In 2001, its stock price plummeted to less than $13 share from $130/share
6. Lesson: don't conduct acquisitions during a bubble - but how do you know when a bubble will burst? (you don't)
7. 1999 June: Uniphase merges with JDS FITEL Inc. -> JDSU
8. 2000 Feb.: JDSU acquired OCLI lens coating for $2.7B
9. 2000 June: JDSU acquires E-TEK fiber optics manufacturing for $17.5B
10. 2000 July: JDSU announces SDL acquisition (its primary competitor) 
11. 2001 Feb: JDSU completes SDL acquisition
12. 2001 June: Fiscal Year ends. $51B in losses reported, mostly do to Goodwill "writedowns" or revaluations. This does nothing to cash. So what is it? Shareholder's equity evaporated. Shareholder's rights to future cash flows disappeared.