Nokia (NOK -9.7%) and Alcatel-Lucent (ALU -7.5%) are off sharply, as investors fret Europe's...


Nokia (NOK -9.7%) and Alcatel-Lucent (ALU -7.5%) are off sharply, as investors fret Europe's debt crisis will prevent the cash-burning companies from raising fresh capital. Nokia is now at levels last seen in 1996, and speculation is growing newly-minted tablet seller Microsoft (MSFT) will consider buying its Windows Phone partner. Nonetheless, a Microsoft exec asserts his company has no interest in making its own phones, shooting down prior speculation.

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Comments (22)
  • TOY1DOC
    , contributor
    Comments (16) | Send Message
     
    WHO EVER THE WRITER IS HE MUST BE SHORT BOTH NOKIA AND ALCATEL-LUCENT . BOTH COMPANIES ARE NOT LOOKING FOR FINACING AT THIS TIME ESPECIALLY ALCATEL-LUCENT. .
    25 Jun 2012, 12:24 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (4738) | Send Message
     
    LOL,

     

    Another believer in Nokia. MSFT will be forced to buy as because if NOK goes to penny stock and burns all its cash to stay afloat, the whole Win Phone platform and strategy goes with it.

     

    MSFT just buy the idiots already and save yourselves.
    25 Jun 2012, 05:35 PM Reply Like
  • pollyserial
    , contributor
    Comments (1113) | Send Message
     
    PERHAPS YOU WOULD CARE TO EXPLAIN THE DECLINE IN YOUR OWN TERMS.
    25 Jun 2012, 01:05 PM Reply Like
  • sreimer77
    , contributor
    Comments (242) | Send Message
     
    fraud
    26 Jun 2012, 03:10 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11168) | Send Message
     
    The debt markets in Europe have seized up for Nokia. They are stuck with their cash and whatever handouts Microsoft sees fit to toss their way.
    25 Jun 2012, 02:09 PM Reply Like
  • sreimer77
    , contributor
    Comments (242) | Send Message
     
    and royalties from Apple for 600million a year.
    26 Jun 2012, 03:11 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11168) | Send Message
     
    Just rumors...no one has produced a document proving EXACTLY how much Apple pays Nokia...if they pay Nokia anything at all.

     

    All that has been posted are newspaper articles about "an agreement" but no hard, cold numbers.

     

    Show me an actual SEC document.

     

    No one can do it.

     

    Gee...I wonder why that is?
    26 Jun 2012, 03:13 PM Reply Like
  • westkite
    , contributor
    Comments (202) | Send Message
     
    Abandon ship, if possible!
    25 Jun 2012, 05:54 PM Reply Like
  • westkite
    , contributor
    Comments (202) | Send Message
     
    Abandon ship if possible.
    25 Jun 2012, 05:54 PM Reply Like
  • pollyserial
    , contributor
    Comments (1113) | Send Message
     
    If you use all caps I will probably be more influenced to follow your excellent advice.
    25 Jun 2012, 05:58 PM Reply Like
  • mikety
    , contributor
    Comments (40) | Send Message
     
    Buying NOKIA at this dirt cheap levels is better than buying greece, italian and spanish bonds!!....OF course Microsoft will deny the news to buy! But deep inside they are salivating to buy!! DIRT CHEAP! How can they pass??
    25 Jun 2012, 06:50 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (4738) | Send Message
     
    They could buy at .50c
    25 Jun 2012, 06:54 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11168) | Send Message
     
    Simply dump your cash into this:

     

    http://yhoo.it/MoMDT1

     

    Wait six quarters then cash out and retire.

     

    THIS is a slam dunk.

     

    SLAM. DUNK.
    25 Jun 2012, 07:57 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (4738) | Send Message
     
    why not buy a .50c call?
    25 Jun 2012, 08:00 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11168) | Send Message
     
    The 50¢ call is not a deep enough value for me.

     

    You could sell 20 $12 calls for each 50¢ call you buy to get into Nokia for free, however.

     

    Then your returns would be infinite.
    25 Jun 2012, 08:04 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (4738) | Send Message
     
    I wish I understood the jibberish you just told me, options are japanese to me.
    25 Jun 2012, 08:07 PM Reply Like
  • divtra
    , contributor
    Comments (159) | Send Message
     
    I am curious on how that would work out.

     

    If you sell 20 $12 calls naked, you would be assuming way more risk than the protection that the single 50 cent call would provide. That is an extremely risky strategy.

     

    Just imagine if NOK starts raising, then that 50 cent call would increase, but so would those 20 $12 calls and you couldn't buy them back reasonably.

     

    You would have to hope to God that NOK doesn't go over $12 else you are up the creek of you know what.

     

    In other words, you break even if Nokia goes below $0.50, you make nice money when Nokia stays from $0.51 to $12 and lose extreme amounts of money past that $12.
    26 Jun 2012, 05:58 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11168) | Send Message
     
    There is NO precedent of ANY stock with declining sales, profits, profit margins and market share going from $2 to $12 within the time period posted.

     

    Absolutely NO precedent. Stocks simply don't increase by 6x with Nokia's horrific metrics. Even Nokia management admits that shareholders will not see a noticeable improvement in the company's financial condition until late 2013 at the earliest.

     

    The fact is Nokia WILL NOT go back to $12 in that time frame which is why the option market is exactly right here.

     

    The risk is quite minimal.
    26 Jun 2012, 03:17 PM Reply Like
  • divtra
    , contributor
    Comments (159) | Send Message
     
    I agree with you that NOK will not get back to $12 by JAN2014, but it is just a gut feeling and there is no surety in this.

     

    More power to you, if you pull this kind of trade off, but I would not be able to sleep at night with such risk.

     

    Why? Imagine two unlikely but possible happenings:
    One, NOK manages to unload the dog that is Nokia-Siemens and gets say $20B for it(it has around 20B in sales 1:1 ratio is not too crazy), far fetched, since they have been trying forever but still possible.
    Second, NOK phones become a big hit in late 2012 early 2013.

     

    By late 2013 NOK has a glowing quarterly reporting a few billion in net earnings. Everyone extrapolates to say $8 billion in earnings. You are saying markets would not reward this company with a 45Billion valuation, which $12 share price would imply?

     

    Granted all of the above is unlikely, but the probability is not minimal.

     

    If I was asked for the most likely scenario, I would say that NOK phones become respectable performers, and NOK becomes a solid also run with stock returning to $5-$6 levels.

     

    In such a case, your strategy would pay off handsomely.
    27 Jun 2012, 06:10 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11168) | Send Message
     
    Fair enough but even, if by some miracle, Nokia began to show signs of life you can easily unwind the trade with only a slight loss.
    27 Jun 2012, 01:44 PM Reply Like
  • No Stink Socks
    , contributor
    Comments (25) | Send Message
     
    Microsoft may be following Google's lead in suckering OEMs to support their platforms, before double crossing them with subsequent moves to compete against them or undermine their viability... it reminds me of the adage: There is no such thing as a free lunch!
    27 Jun 2012, 03:17 AM Reply Like
  • TOY1DOC
    , contributor
    Comments (16) | Send Message
     
    ALCATEL-LUCENT announces METRO CELL EXPRESS - a solution that combines its small cell Light Radio technology+

     

    By the way have you heard that AT&T is in the market to PURCHASE 100,000 single cell units similar to ALU's METRO CELL EXPRESS. The toss up is between ALU, ERICSON and maybe CISCO.

     

    However the talk is that ALU has the inside track because of the ability to place the units anywhere, such has on the top of a street light or roof of any nearby roof, etc.
    1 Jul 2012, 09:24 AM Reply Like
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