Seeking Alpha

Loeb discloses Nokia stake in letter, thinks dividend/buyback is possible

  • In his Q3 investor letter, Dan Loeb says Third Point took a stake in Nokia (NOK +2.1%) after the Microsoft deal was announced, and thinks "either a buyback or special dividend is possible" once the deal (set to leave Nokia with €8B in net cash) closes.
  • Given Loeb's history, look for him to push for cash returns if Nokia doesn't take the initiative to deliver them. Multiple reports have indicated Nokia is interested in using a chunk of its cash balance for M&A.
  • Loeb adds 40% of Nokia's market cap is now covered by pro forma net cash, and that all three of its remaining businesses (NSN, Here, IP licensing) are cash flow positive.
  • He talks up NSN's restructuring efforts, Here's "exceptional share" (pegged at 80%-90%) of the automotive navigation market, and licensing opportunities opened up by Nokia's 10K patent families.
  • Earlier: Loeb reportedly takes stake in Nokia
Comments (32)
  • Ruffdog
    , contributor
    Comments (1780) | Send Message
     
    How can a company on the brink of Bankruptcy even think about dividends and stock buyback. The MSFT deal will not be voted on until 11/19. It is not a done deal.
    22 Oct 2013, 10:56 AM Reply Like
  • gwynfryn
    , contributor
    Comments (4613) | Send Message
     
    Hardly "on the brink of Bankruptcy", but you are right, and I very much doubt they are; it's just this Loeb guy engaging in wishful thinking. Nokia have a lot of consolidating to do, and it would be madness to reduce their cash pile unnecessarily, until they are properly set up. Even then, they won't need to "bribe" shareholders in this way, as it look like the share price will be doing it for them.
    22 Oct 2013, 11:32 AM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Please provide a source and financial analysis to back up the "bring of Bankruptcy" claim.
    22 Oct 2013, 07:15 PM Reply Like
  • Ruffdog
    , contributor
    Comments (1780) | Send Message
     
    Look at the last 4 earnings reports, decide for your self how long they can keep up the burn rate without MSFT cash.
    23 Oct 2013, 10:53 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (9377) | Send Message
     
    Who would have thought last year that at this point Nokia would be much stronger than Blackberry?

     

    Wow, what a turnaround!
    22 Oct 2013, 11:01 AM Reply Like
  • asifruman
    , contributor
    Comments (75) | Send Message
     
    I did... :)
    22 Oct 2013, 11:07 AM Reply Like
  • beyond dreams
    , contributor
    Comments (195) | Send Message
     
    DLL,
    There were many of us who thought Nokia was a better investment than Blackberry this time last year. Go back and look at the comments back then.

     

    Still long Nokia
    22 Oct 2013, 01:30 PM Reply Like
  • chrome188
    , contributor
    Comments (77) | Send Message
     
    Nokia had more choices than BB, and better backing
    23 Oct 2013, 04:25 AM Reply Like
  • gwynfryn
    , contributor
    Comments (4613) | Send Message
     
    And did a lot more advertising!
    23 Oct 2013, 06:00 AM Reply Like
  • jammerculture
    , contributor
    Comments (402) | Send Message
     
    I hate these vultures.
    22 Oct 2013, 12:01 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Would like to see more from Loeb than "hey we're gonna raid all the cash from Microsoft."

     

    Nokia management don't let him bully you.
    22 Oct 2013, 07:20 PM Reply Like
  • DWD Investing
    , contributor
    Comments (9442) | Send Message
     
    Nokia should take care of it's own house first, then if there is extra cash that is really "extra," and they want to reward shareholders, a buyback would be my choice. A buyback is the gift that keeps on giving.
    23 Oct 2013, 12:01 AM Reply Like
  • JoseV
    , contributor
    Comments (405) | Send Message
     
    Pure myth! Buybacks, historically, have not affected shares prices except when they have reduced outstanding shares by more than 20% which has been very seldom
    23 Oct 2013, 01:38 AM Reply Like
  • gwynfryn
    , contributor
    Comments (4613) | Send Message
     
    Too often, buybacks just have enough volume to counter recent stock awards, which is why they seldom push prices up. It's illegal to use bought back stock as awards, but if it's done retroactively, that's OK, apparently; a loophole that needs closing?
    23 Oct 2013, 06:04 AM Reply Like
  • DWD Investing
    , contributor
    Comments (9442) | Send Message
     
    JOse, really? I didn't know that, but are you talking about long term price or short term?

     

    So, anyway, I say let them buy back 20%!
    23 Oct 2013, 07:59 PM Reply Like
  • DWD Investing
    , contributor
    Comments (9442) | Send Message
     
    Guys I'm not talking about buyback insta-increase. I'm talking about supply and demand, as in less shares + increased demand = future higher stock prices.
    23 Oct 2013, 08:01 PM Reply Like
  • Mike Andrewes
    , contributor
    Comments (75) | Send Message
     
    Brink of bankruptcy? C'mon man.
    22 Oct 2013, 12:20 PM Reply Like
  • vk007
    , contributor
    Comments (53) | Send Message
     
    NO BUYBACKS! EVER!

     

    Nokia spent around USD 25 billion on buybacks and what good has Nokia gained from that? Buybacks is one reason why NOK had to sell the D&S to MSFT.

     

    The only way the deal with MSFT is cancelled is that Q3 clearly over 10 million Lumia phones were sold on and D&S makes ebit over EUR 0,5 billion. Then the vote on Nov 19 is interesting.
    22 Oct 2013, 01:29 PM Reply Like
  • JoseV
    , contributor
    Comments (405) | Send Message
     
    Right on
    23 Oct 2013, 01:38 AM Reply Like
  • JoseV
    , contributor
    Comments (405) | Send Message
     
    Right on
    23 Oct 2013, 01:38 AM Reply Like
  • logic001
    , contributor
    Comments (140) | Send Message
     
    We don't need dividends until Nokia have a clear money producing plan.
    22 Oct 2013, 02:44 PM Reply Like
  • JoseV
    , contributor
    Comments (405) | Send Message
     
    Right on also
    23 Oct 2013, 01:39 AM Reply Like
  • User 6348921
    , contributor
    Comments (86) | Send Message
     
    I am firmly against Mr Loeb efforts. What does share buyback/one off dividend can achieve- nothing for the company long term progress. If anyone followed Loeb's Yahoo moves it's clearly evident he doesn't have company long term interests at heart.

     

    It could be rewarding for the company in the short term for shareholders but Nokia needs a firm long term strategy. To execute that it need to cash for acquisitions. Nokia may remain in smartphone or Devices segment due to it's strong reputation. However instead of smartphone it could re-enter in to that segment with a smart gadget (not as phone).

     

    We are not against regular dividend but there is no point in making a big one off payment.
    22 Oct 2013, 08:41 PM Reply Like
  • DWD Investing
    , contributor
    Comments (9442) | Send Message
     
    User,

     

    I agree. That's frivolous. If anything, I'd like to see a small % buyback YY.
    23 Oct 2013, 12:03 AM Reply Like
  • JoseV
    , contributor
    Comments (405) | Send Message
     
    Small buybacks as well as most big buybacks make no sense
    23 Oct 2013, 01:40 AM Reply Like
  • DWD Investing
    , contributor
    Comments (9442) | Send Message
     
    Supply and demand.
    23 Oct 2013, 08:02 PM Reply Like
  • ted lujan
    , contributor
    Comments (811) | Send Message
     
    A small token dividend would give the share holders the message that all is well with the company. Needless to say it would also push the price of the stock in an upward direction.
    22 Oct 2013, 09:50 PM Reply Like
  • DWD Investing
    , contributor
    Comments (9442) | Send Message
     
    Reinstatement of a dividend would bring in more institutional investors.
    23 Oct 2013, 12:03 AM Reply Like
  • JoseV
    , contributor
    Comments (405) | Send Message
     
    Big maybe
    23 Oct 2013, 01:41 AM Reply Like
  • DWD Investing
    , contributor
    Comments (9442) | Send Message
     
    Well put it this way: The possibility of attracting institutional investors with no dividend is less than with dividends. Argue that.
    23 Oct 2013, 08:03 PM Reply Like
  • gwynfryn
    , contributor
    Comments (4613) | Send Message
     
    OK dwd, I'll give it a go; many see dividends as an admission that the stock is unsafe, which is demonstrated by the way most people regard mega dividend payers (> 15%) as dodgy. As for low dividends (<3%) which barely keep pace with inflation, they don't have much influence over what trades I'd do, and I'm frankly bemused by those who fantasize about stocks like BAC bringing in those levels of payouts, as actively trading such stocks will create a far more significant income. If I see a big payer at a very low point in its price cycle (and that kind do tend to be very cyclic) then I'd buy and hold, as they spend most of the cycle at an average price considerably more than was paid (so you can get all your money back in as little as four years, and most survive longer than that) and I'd also bank my money with any blue chip that pays middling divis (Like France Télécom, or better yet Eléctricité de France, 80% government owned, and they'll insist on getting their cut) towards the end of the year, as it simplifies paying taxes, but that's about it, really. This argument brought to you due to being in a state of shock, having found not a single article on BBRY in my mail box...
    24 Oct 2013, 08:31 AM Reply Like
  • JMstocks75
    , contributor
    Comments (250) | Send Message
     
    the low volume day before earning was a true tell, hold your shares, people want them
    28 Oct 2013, 05:57 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs