Naive

Why Nortel is Still Important to Canada

Actually, all debt is $4.5 bil including all preferred share capital, cash $2.4bil, the portion of debt included that is due 2011 is $1 bil, value of all businesses (ex.debt and cash) is $5.5 bil conservatively under normal conditions. If you do the math you will discover that the business itself will survive in one form or another, but common share holders will not, or will wait a very very very long time. The winners will be debt holders and maybe preferred share holders.


On Dec 30 09:23 AM LastHopes wrote:

> One of the best R&D Bell Labs (LUCENT) has been sold to France (Alcatel).
> Who is going to pay for Nortel's R&D? Canada or shareholders?
>
> Obviously Huawei would make milk out of Nortel.
> Price tag is very low: $7Bil debt - $2Bil cash + $1Bil Market Cap
> = $6Bil for a whole pie.
> Chinese are very good at Buy/Sell, capitalized on the past R&D and
> destroy any future R&D. I am sure they are going to make huge profits
> out of it, but they will cut R&D to ZERO and are going to spend only
> on maintenance and support tasks("R&D&qu.... It is all about profit,
> but not R&D.
> Yes, Canada could convert Nortel to University or government supported
> lab, but I doubt it would fly.
>
> BTW, the future of Nortel's R&D will be the same as the future of
> most of Corp acquired by Computer Associates. It is super B model.
> Buy cheap Corp with customer base and with huge past R&D investments,
> lay off 90% reduce R&D to 1% and make milk out of it.
> It is modern scavenger/parasite model, but it works.