Seeking Alpha

Nokia soars following Microsoft deal

  • Nokia (NOK) shares jump 37% in Helsinki following news that it's selling its mobile phone unit to Microsoft (MSFT) as part of a deal worth $7.17B.
  • SA author Charles Fox reckons a major motive behind the transaction is that Nokia CEO Stephen Elop is now a dead certainty to replace Steve Ballmer as Microsoft boss.
  • Shorn of a big loss maker and sitting on a nice cash mountain, the future seems bright for Nokia, although its potential could now be limited.
  • Some might think that Microsoft is overpaying for a business "many investors and analysts wrote off as dead," but Fox thinks $5B "seems like chump change for a...division that once ruled the phone market" and could come back.
  • Jacob Steinberg echoes these sentiments. "Nokia's phone business deserves a much better price than $5B considering how it generated $20.38B in revenues last year," says Steinberg.
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Comments (7)
  • shakazoid
    , contributor
    Comments (247) | Send Message
     
    Already @5.41. Looks like shorts are gonna have to to drop their pants again
    3 Sep 2013, 05:13 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (10032) | Send Message
     
    I really, REALLY wished I bought more LEAPS calls last year.

     

    I repeatedly said selling the phone division was the best option but I didn't think Nokia would actually have the intestinal fortitude to do it!!

     

    Oh well...I still did well.

     

    First round on me!! ;)
    3 Sep 2013, 05:43 AM Reply Like
  • Ray Lopez
    , contributor
    Comments (1711) | Send Message
     
    LOL, I guess the NOK bears were right in a way...Elop was a Trojan Horse designed to make NOK a MSFT takeover target. I myself have written off this investment, bought when it was in the teens.
    3 Sep 2013, 07:14 AM Reply Like
  • mitrado
    , contributor
    Comments (2028) | Send Message
     
    I'm glad I have a few NOK shares, as I feel sad as a Nokia consumer.
    I'm sad because I truly believe Microsoft will end up being the demise of Lumias... but at least my Nokia shares compensate that pain. I love my Lumia... but I'm very hesitant about the possibility of having to buy a MS Lumia or XBox Lumia in the future.

     

    Should I sell my shares today or wait to see if the deal is really going through or not? What are you guys doing?
    3 Sep 2013, 08:47 AM Reply Like
  • slcUTAH
    , contributor
    Comments (542) | Send Message
     
    Tough call. I think a lot of NOK investors might sell a portion of their position to collect some profit. I'm deciding what to do, too. Will Nokia share value go further up from here with NSN alone?

     

    -Cheers.
    3 Sep 2013, 09:54 AM Reply Like
  • SquareHead
    , contributor
    Comments (91) | Send Message
     
    Does anyone actually know how the deal will be structured? Possibly a cash payout to shareholders of record and letting the market find the new share price? It sounded like a cash deal paid out of off shore cash holdings. Does anyone know what the cash payout per share would be and are there any estimates on Nokia's market price after based on residual holdings? Was there any word on the time frame? Everything that addressed the specifics was ambigious.
    3 Sep 2013, 12:44 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (2107) | Send Message
     
    @SQ Your best info is the official Nokia press releases, here:
    http://press.nokia.com
    3 Sep 2013, 02:45 PM Reply Like
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