sell,buy or hold?Tellabs shares fall on worry AT&T switches to Cisco

Source:reuters.com
Shares in Tellabs Inc (TLAB.O) were down 6.3 percent on Tuesday after Morgan Stanley downgraded the telecommunications equipment maker's shares, citing an expectation that AT&T Inc (T.N) would switch to Cisco Systems (CSCO.O).

Tellabs shares fell 44 cents to $6.37 on Nasdaq after Morgan Stanley analyst Ehud Gelblum said AT&T is planning a "relatively quick transition away from" Tellabs 8860 router to a product from Cisco about a year from now.

AT&T, which brought in 21 percent of Tellabs revenue in 2009, declined comment as did Cisco.

Tellabs spokesman George Stenitzer said investors appeared to be overreacting to a rumor in the market and referred questions about AT&T to the operator itself as his company was unable to comment on their current agreement.