longoil

Nortel Looking at 3 Serious Bids for Metro Ethernet Business

An interesting theory, but not all of the three are serious buyers.

1) Cisco has a metro ethernet product line and a well eatblished established global customer base. They typically acquire small nimble startups, not bloated behomouths like Nortel where integration into the Cisco culture would be impossible.

2) Huawei also has a metro ethernet product line. There is remote possibility that they would buy the Nortel MEN division for the North American customer base.

3) Siemens also has a metro ethernet product line and an established European customer base. As with Huawei, there is a remote possibility they would want Nortel MEN for its North America customer base.

Someone has to explain to me why Nortel thinks they will get 1 to 2 billion dollars for one division, when the total market capitalization for all of Nortel is currently $135 million. Factor in outstanding debt and pension liability and the entire company has an enterprise value in the negative billions. The zero stock price makes a lot of sense.