Nortel's Stock Price Is Irrelevant

This may come across as sacrilegious but Nortel’s (NT) stock price is pretty irrelevant.

Sure, its decline has provided good “entertainment”, and I’ve been as guilty as anyone of highlighting the series of new lows. For now, however, the stock is being controlled by two major factors: growing concerns about liquidity and emotions.

This one-two punch has hammered Nortel as well as investors.

But it’s s separate beast from what’s happening within the company. Until Nortel comes clean on its new structure and strategic direction on Nov. 10, there’s nothing fundamental that investors or analysts can grasp as real and tangible.

It’s a big guessing game with analysts such as National Bank Financial’s Kris Thompson and UBS Securities’ Nikos Theodosopoulos guessing that troubled times are ahead.

Comments

[MarvinMBA:]

Nortels problems seemed to all come with the faulty financial statements some time back that resulted in lawsuits and major fines and paybacks to the injured stockholders. Part of the problem can be attributed to management spending a great deal of time re-doing past financial statements and taken up with the Lawyers trying to defend themselves and the company as well as many management changes. NORTEL WAS NOT AND HAS NOT PAID ATTENTION TO BUSINESS and it missed many many opportunities. Management and the Board of Directors have NOT BEEN WATCHING THE STORE for some time now. In my opinion WHY SHOULD A INVESTOR TRUST NORTEL TO DO THE RIGHT THING??? They screwed up so badly in the past that integrity has been destroyed in my opinion...MarvinMBA

2008 Oct 31 01:02 PM

[Former Nort...:]

While everyone within Nortel had high hopes that Mike Z would send us in the right direction, it's clear that his performance does not live up to the hype. He's left too many serious decisions to the telephony-inexperience... cronies that he brought on board like Joel "Slap Happy" Hackney, Dietmar "Am I Still At IBM?" Wendt, and the other "stellar", way overpaid management team that will cry all the way to the bank as they pass the unemployed ex-Nortelians that cared for the company.

2008 Oct 31 03:11 PM

[longoil:]

"Nortel Is Irrelevant" would be a better title for this article.

The problem with Mike Z, is that he thinks business models from totally different industries can be applied universally to any business.

For example, he was preaching his General Electric mantra for the longest time "If we are not number 1 or 2, we should sell the business".

This is fine for most of GE's business units where there is a hand of competitors (e.g. jet engine sector has only 3 major players GE, Pratt & Whitney and Rolls Royce). But in telecom many more players can co-exist in a given telecom sector. Most telecoms sectors (optical, wireless, entreprise, broadband, etc.) can easily have up to 10 major players (Nortel is not # 1 or 2 in any of them). His GE mantra explains why he wants to sell the MEN division.

2008 Oct 31 03:31 PM

[Red Green:]

Maybe the stock price is irrelevant to you but not to the thousands of stockholders (including employees and former employees) to whom it is very relevant. Relevant to their financial well-being and relevant for what it says about the company management--past and present. The people who destroyed this once great company are criminals and incompetents. Read Dilbert and you will be reading about Nortel's management from John Roth going forward. The fact that I paid 40 times what the stock is worth today is not irrelevant to me. Mr. Z and his team are very relevant right now. I hope they soon become irrelevant.

2008 Oct 31 03:34 PM

[john peters:]

I sold it at 29...I had bought 500 shares at 50 cents, when the tech bubble busted in 2000...stiock had a reverse split...i escaped a bullet by accident..when china rolled over for 1 day..i took the advise of the tv talking heads and sold any stock I was up in since bubble...

2008 Oct 31 08:44 PM

[tomyris:]

Thanks John - we needed to know that.

2008 Nov 01 05:05 AM

[JBGeuting@a...:]

The Nortel-stockholder's situation is despairing. Every time Mr. Zafirowski is adressing the public, he is talking about the better future of Nortel. But the reality turns out with the same regularity into the opposite direction of what Mr. Zafirowski is talkin about, becomes worse and worse.
Please, Mr. Zafirowski, tell us this time, when you are speaking to all your stockholders all over the world on November 10, the truth, only the truth about the economic situation and outlook of Nortel. I lost up to now 86% of my input into my not small number of Nortel-Stocks. I want to save at least the rest of 14%!
It is really despairing!
J. B. Geuting

2008 Nov 01 07:32 AM

[User 93660:]

The horse has suffered too much and so have the people watching it die.
Shoot the horse and sell the remains to Huawei.
Put the trainers in jail for cruelty to animals.

2008 Nov 01 11:34 AM

[BAS:]

Follow Mr. Z's trail. GE financials - not a leader, Motorla Cell - drowning, Nortel - underwater ($1.25 is really $0.10). His leadership has tried to force GE's business model on another business. It appears he has not made it work in the past and is not making it work now & in the future.

2008 Nov 01 12:06 PM

[Ex Notelian:]

Up to this point, people start blaming Mike Z for badly leading the company. As ex-Nortelian, I have found that it is from bad attitude of Nortelian. As company goes down more, the more circles of friends are being formed to pectect each other with some managers in the center of the circle as a goup patron. Those managers are not there to manage the work, but to collect rumors and to look for other opportunities, like a snake, to protect him and his circle of friends in case of some of the session get disappeared by top management. That attitude is really bad and irrelevant to what they want to achieve or save the company form going downhill more.

2008 Nov 03 12:39 PM