Nortel: Look Away from the Charts 6 comments
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It’s certainly hard to pull your eyes from the streaming charts of your Nortel (NT) stock, but I’m suggesting you do exactly that.
The future of Nortel is bright and hyper-connected. Perhaps most important of all, Nortel appears to be working hard to stay solvent (even willing to consider bids for one its top performing sectors, MEN, to improve the balance sheet).
The consensus in blogs and articles on the net is that Nortel is comprised of too many technology sectors without having a sense of the technologies longevity. This point is made by many bloggers and, I’m sure most familiar with Nortel, would agree. Don’t forget, however, that Nortel has gained a lot of experience from the internal convergence of voice and data platforms and this experience will not show up in your streaming charts for months or years to come.
Case in point is the e-Government series of recent news releases on Nortel’s site. In the month of October, 2008, Nortel has published some 18 news releases highlighting large deals for banks, hospitals and governments worldwide. Visit: Nortel: News Releases.
One can sense that Nortel’s Unified Communications technology is poised to be a significant market player in hyperconnected communications; allowing businesses (and entire governments) to break though the barriers of cross-platform communications while employing cost effective, full voice and data solutions utilizing Nortel’s most precious resources; a century of experience and 4G wireless.
It’s also important to point out that Nortel offers these solutions while mitigating single points of failure (a common concern when equipment falls under one provider) and does so in a highly competitive market. In my opinion, I’m glad to see Nortel shift its immediate visions away from the iron-metal systems of yesteryear and respond to the emerging markets, after all isn’t that what good companies do.
Disclosure: Author holds a long position in NT
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This article has 6 comments:
You're disclosing that you have a long position.
Could you also disclose for how long you had it? What's your average?
I think this is very relevant to understanding your point of view.
I only wanted to point out that there is lot of talent at nortel and even though there is overlap is some of their solutions (BCM overlaps Communication Server platform, etc.) - they have gained considerable experience in dealing with their own internal communications convergence and this may bode well for them in the future and help streamline their costs and the cost of their offered solutions.
As you have no bio yet on SA, can you provide some info about yourself?
Thanks.
If you had to guess who had more VOIP phones per employee internally, a Nortel (VOIP leader of the world) or Cisco (A whole lot of everything company) who would you put your money on?
And it has been this way for years, btw.
So this information you are mentioning is interesting as an anecdote, but that's about it. Focusing on stuff like that at this point, trying to predict Nortel's bright future based on those anecdotes may yield very predictable results indeed.
This is why I asked you to expand on your "NT Long" disclosure. I had a feeling this was probably not your first NT prediction.
One really smart guy once said "Forecast tells you a lot about the forecaster but nothing about the future", so take my skepticism for what it is. I'm just looking at what your forecast tells me, I'm not trying to be difficult here.
I can't give an NT forecast at this point. Simply because it depends on what some people are going to do. If those people continue to do what they have been doing so far (cut costs, implement 6-sigmas, etc) the results are likely to be more of the same, for some time, until such time runs out. If, on the other hand, some drastic changes are made ASAP, outcome may still be changed, but there is less and less time for that and I'm not sure anyone in position to do something about this is sufficiently motivated. And if they are motivated now, why now and not a year ago? It just seems less and less likely.
I think Vladimir and the author have made some good points/counters. There is something there at Nortel. Lots of experience and R&D prowess. But it's fair to question whether it will survive long enough to be leveraged by NT or whether someone else will come along (or already has) to pick the low hanging fruit.
In the meantime, let's not give ourselves a coronary. Life's too short.
Sniffing the beans as we speak...
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