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Nokia (NOK) will be removed from the Euro Stoxx 50 index on March 18 (translation), along with...

Nokia (NOK) will be removed from the Euro Stoxx 50 index on March 18 (translation), along with GDF Suez (GDFZY.PK). Replacing them are EADS (EADSY.PK) and Schneider Electric (SBGSY.PK).
Comments (38)
  • JayXu
    , contributor
    Comments (266) | Send Message
     
    O dear, thats not a good news.
    1 Mar 2013, 06:25 PM Reply Like
  • Veritas1010
    , contributor
    Comments (1562) | Send Message
     
    What is the basis for such elimination?
    1 Mar 2013, 06:32 PM Reply Like
  • C. Guivi
    , contributor
    Comments (127) | Send Message
     
    Market Cap!
    1 Mar 2013, 06:39 PM Reply Like
  • geodan85
    , contributor
    Comments (166) | Send Message
     
    Maybe, but GDF Suez is not market cap related (eur31.4bil), so it may have to do more with regional operations and the European concentration or not.
    2 Mar 2013, 11:45 AM Reply Like
  • C. Guivi
    , contributor
    Comments (127) | Send Message
     
    I think it's a good thing for traders!
    1 Mar 2013, 06:40 PM Reply Like
  • aoyandong
    , contributor
    Comment (1) | Send Message
     
    oh dear, why it is a good thing for traders?
    2 Mar 2013, 03:28 AM Reply Like
  • geodan85
    , contributor
    Comments (166) | Send Message
     
    May reduce some volatility since Euro Stoxx 50 program trades won't need to trade NOK anymore. Also, most of the impact will be in the ordinary shares traded in Helsinki and London. As to the impact, on the day it officially comes out the European close (11:30 am NY time) may see a temporary push down on some volume during the final auction, otherwise it really won't have a tremendous impact.
    2 Mar 2013, 11:54 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8659) | Send Message
     
    Great news for Nokia!!
    1 Mar 2013, 07:29 PM Reply Like
  • fafatooey
    , contributor
    Comments (386) | Send Message
     
    Pig meet lipstick.
    1 Mar 2013, 08:32 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1970) | Send Message
     
    Not good. Index and other funds that follow Euro Stoxx 50 are now forced to sell their $NOK positions:
    http://bit.ly/XulKT5
    1 Mar 2013, 10:06 PM Reply Like
  • vizZir
    , contributor
    Comments (40) | Send Message
     
    Not sure about that. Funds are mainly relying on the rating.
    2 Mar 2013, 10:03 AM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1970) | Send Message
     
    Last time this happened there was a 17% drop in stock price, and then nice bounce back even higher....
    http://seekingalpha.co...
    2 Mar 2013, 01:14 PM Reply Like
  • Cindywu1018
    , contributor
    Comments (139) | Send Message
     
    According to major German media, experts were expecting this.

     

    Retailers may react in panic selling which will be only for short term. Nokia was falling down in 2011, and is climbing up in 2013!

     

    I will buy more if Nok drops 17% as you said like in 2011 (well, I don't think this is gonna happen next week);
    3 Mar 2013, 05:08 AM Reply Like
  • solucky
    , contributor
    Comments (8124) | Send Message
     
    If experts expect it, we may have seem some of the expected downtrend. But i think there will be a 5-10% drop and NOK reach my buying range.
    3 Mar 2013, 11:44 AM Reply Like
  • btbriant
    , contributor
    Comments (228) | Send Message
     
    Seppo2: "Last time this happened there was a 17% drop in stock price"

     

    Not really.

     

    Here are some Nokia ADR prices from that time -

     

    7/21/11 - 625 high for the day
    8/11/11 - 482 low for the day
    9/1/11 - 684 high (day the news broke)
    9/23/11 - 512 low
    10/27/11 - 738 high

     

    So, yes, there was a price movement in the following 3 weeks, but, no, it wasn't anything out of the ordinary in terms of daily Nokia volatility at the time.
    5 Mar 2013, 01:53 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1970) | Send Message
     
    Strictly speaking from the time of announcement to date of execution there was a 17% drop. That's all I am saying.

     

    Beyond that, you are right, there was volatility left and right up and down around this time. I have now idea what caused any of these movements.

     

    And now this time at least initially there has been a very moderate drop if any. Go figure :)

     

    I did some numbers elsewhere in SA (see my comment history), and it seems like that the money directly and strictly tied to this index is of the order of 30% of daily volume, i.e. not much at all.
    5 Mar 2013, 02:20 PM Reply Like
  • My Capitalist Pig Side
    , contributor
    Comments (19) | Send Message
     
    It's more what I, personally, want to invest in.
    2 Mar 2013, 01:30 AM Reply Like
  • lancair
    , contributor
    Comments (8) | Send Message
     
    i am confident NOKIA will not only survive, but do very well
    in 2013 on average , Long for nok @ 3.60
    2 Mar 2013, 02:25 AM Reply Like
  • Greg Wagner
    , contributor
    Comments (3) | Send Message
     
    How might this be "good news" for long-term investors?
    2 Mar 2013, 02:37 AM Reply Like
  • yy01
    , contributor
    Comments (6) | Send Message
     
    The removal from the index won't change the fundamental of the company, if the stock price plunge, it is a good opportunity to accumulate.
    2 Mar 2013, 03:30 AM Reply Like
  • solucky
    , contributor
    Comments (8124) | Send Message
     
    Yep, my buying range is between 2,50 and 2,65.
    2 Mar 2013, 04:28 AM Reply Like
  • Greg Wagner
    , contributor
    Comments (3) | Send Message
     
    I'm long on $NOK...how might this "good news" affect long-term investors?
    2 Mar 2013, 02:50 AM Reply Like
  • Alverman
    , contributor
    Comments (23) | Send Message
     
    The removal from an index has nothing to do with the long-term fundamentals of a company.
    2 Mar 2013, 03:10 AM Reply Like
  • solucky
    , contributor
    Comments (8124) | Send Message
     
    And dont forget, if the NOK bet is successfull they will be back in the Index too.
    2 Mar 2013, 04:28 AM Reply Like
  • alukro
    , contributor
    Comments (76) | Send Message
     
    EA got removed from the top 500 and it's still going pretty strong, so I'm not too worried.
    2 Mar 2013, 03:28 AM Reply Like
  • el stevadore
    , contributor
    Comments (143) | Send Message
     
    exactly.
    i sold my EA too early, a week or 2 ago now i think.
    stocks being removed from an index can be used as a contrarian buy signal. the index removes the stock on past performance, not future.
    13 Mar 2013, 02:29 AM Reply Like
  • eliorr
    , contributor
    Comments (9) | Send Message
     
    What impotent are the real sale trend of Nokia and profit margins!
    2013 seems Nokia's key change year to be again a very
    successful mass marked well and loved brand.
    The Q2/3/4 2013 results may cause high peeks in quite high chance for the NASDAQ stock value. No Nokia has a good manifest if low to high-end highly attractive products.
    2 Mar 2013, 04:57 AM Reply Like
  • WhatdoIknow1
    , contributor
    Comments (661) | Send Message
     
    Being delisted from any exchange is always bad. Having a CFO suddenly quit in February didn't help either. That being said, Nokia did do something no one expected this last quarter. They turned a profit. Nokia has had some dark days. They are just now starting to emerge from the storm into relevancy. Use these days to pad your position with a long term view and you will be richly rewarded. Opportunities like this don't come along to often. Their products are price competitive, superior and reputable. They only lack main stream recognition.

     

    Long Nokia
    2 Mar 2013, 07:58 AM Reply Like
  • Heinz Doofenshmirtz
    , contributor
    Comments (273) | Send Message
     
    It wasn't "delisted from the exchange". Stoxx Limited, which compiles an index just like the Dow Jones (30), merely chose to replace Nokia from it's list of 50 stocks.

     

    http://bit.ly/XhSkci
    2 Mar 2013, 06:15 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1970) | Send Message
     
    See more discussion in $NOK Stocktalks. Last time this happened 1.5 years ago the stock dropped 17% in three weeks leading to the closing date. And then bounced back even higher then before the dropping was announced.
    http://reut.rs/ZTj3yi

     

    This will be a great buying opportunity for long term investors like me. The fundamentals have not changed, they are in fact getting better day by day.

     

    I wonder if this is why the institutional shorters have been shorting NOK even more and like crazy recently? This is a predictable event, I did not have a clue, but learning new lessons every day.
    2 Mar 2013, 08:50 AM Reply Like
  • Origa
    , contributor
    Comments (544) | Send Message
     
    I agree, but I must cautious you to look at the numbers when Nokia and Blackberry release earnings etc.

     

    The truth lies there.
    2 Mar 2013, 12:20 PM Reply Like
  • pabcanc
    , contributor
    Comments (222) | Send Message
     
    NOT IF THEY GRAB THIS TEhttp://http://bit.ly/Xhf4cq FIRST !
    psykes@sympatico.ca
    2 Mar 2013, 10:38 AM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1970) | Send Message
     
    Some back of envelope numbers:

     

    Putting the market manipulation and games aside, the first basic question is how much money is tied to funds strictly following Euro Stoxx 50. Assuming that these funds have to follow the index religiously, one can get an estimate about the sell off on March 18th when these funds have to drop NOK1V.

     

    The two biggest such index funds seem to be
    SPDR EURO STOXX 50 ETF (NYSE: FEZ)
    market cap $1.59B
    iShares EURO STOXX 50 ETF (NYSE: EUE)
    market cap 4.9B EUR

     

    Totaling $7.96B in market cap

     

    Nokia is 0.68% of the index:
    http://bit.ly/Z5l7xg

     

    So these two own $54M, or 15M shares. That is 0.40% of Nokia's $13.4B market cap. 15M shares is only ~30% of $NOK's daily volume in NYSE.

     

    So the _direct_ consequence of this should not be huge.

     

    The above of course takes into account two largest index funds directly investing in the index. The real situation is of course much more complicated with a lot of funds following the index in a variety of ways. But those also have more flexibility in their investing decisions, i.e. they do not have to blindly go and sell exactly on the date of change but can plan and game the reduction properly etc etc...
    2 Mar 2013, 02:07 PM Reply Like
  • Heinz Doofenshmirtz
    , contributor
    Comments (273) | Send Message
     
    You've got a really good point there. How many funds are tied to the EURO STOXX 50 index. Which is different from the STOXX Europe 50 index (that dropped Nokia in September, 2011).
    2 Mar 2013, 06:18 PM Reply Like
  • lbgoldsten
    , contributor
    Comments (8) | Send Message
     
    I bought Nokia a few months ago at 2.60, when the majority of analysts said it was a strong buy, and when it paid a handsome dividend.
    One of its alleged strong points was that, because of its huge trove of patents and the siemens connection, there was "unquestionably no cash flow problem".
    Suddenly, the headquarters building was sold to raise capital, and then, the crowning blow, the dividend was completely eliminated in order to provide $750 M to the bottom line (not a very strong picture for a company with "no cash flow problem").
    If nothing else, the company has a lousy, if any, way of communicating with its stock holders (It just doesn't tell them anything!). I sold at $4.11. Now the stock is around 3.50 and the company has been de-listed. I'm glad I got out!
    2 Mar 2013, 02:59 PM Reply Like
  • lbgoldsten
    , contributor
    Comments (8) | Send Message
     
    Retired Navy Captain, ex-bank president, now an attorney with a specialty in real property law. Have visited Helsinki and have always followed and been fond of Nokia. I'm disappointed in its present
    position. I believe that management should be more open with the stockholders about plans and projections.
    The complete elimination of the dividend was a big shock. It would have been more favorably received if the use of the savings to the company was disclosed and/ or the dividend was not completely eliminated.
    2 Mar 2013, 03:09 PM Reply Like
  • akoshi
    , contributor
    Comments (87) | Send Message
     
    the elimination of the dividend made perfect sense. if you had been following nokia on SA you would have seen that we had already discussed it in great length as to why a dividend elimination for 2013 is useful in the restructuring efforts. I dont really understand why it came as a big shock to you or anyone in the financial world really.
    4 Mar 2013, 12:17 PM Reply Like
  • heloise8
    , contributor
    Comments (439) | Send Message
     
    I love dark horses. They pay well if you hang on tight.
    2 Mar 2013, 10:15 PM Reply Like
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