Nortel has issued a statement about the RCMP laying charges against three former executives: Frank Dunn, Doug Beatty and Michael Gollogly:
“Nortel has not been charged and was not the target of this investigation. The company has fully cooperated with the RCMP and will continue to do so. This is in relation to former executives of the company who were dismissed for cause in 2004.
“Nortel is rebuilding a great Canadian company while upholding the highest standards of integrity and ethics. Incredible progress has been made in the last few years, and today a new Nortel is emerging under the leadership of a new management team with a proven track record. The company has restored a solid financial controls foundation, is gaining traction with customers and is focused on the future.
“Nortel and its employees are highly determined to compete and win in the marketplace and today’s announcement by the RCMP does not distract the company from the work ahead.”
“Incredible progress has been made in the last few years”
Not by any public measure that means anything has 'incredible' progress been made. At best, 'some' progress has been made on cost control. Other than that, I'm sorry, I don't see it. In fact, I would say that the overall health of the company, based on the state of the portfolio and the stock price, is worse than when MZ arrived. Somebody help me understand.
http://ext.com ex-nt
The stock was higher when Dunn left than it is today. I guess progress ain't what it's cracked up to be…
Observer
You guys need to read about bubbles and busts and then think about the context in which Nortel and everyone else operated. Also you need to examine whether stock price is the best measure of a company's value. With hedge funds and other financial instruments playing with the derivatives market, stock price is no longer a good measure of any company's performance, especially in a secular bear market. I recommend the following:
The Road To Revulsion
by James Montier
A couple of months ago I wrote a note arguing that events unfolding the in the US weren't a black swan but rather an example of a predictable surprise (see Mind Matters, 13 March 2008 http://sgresearch.socgen.com/publication/strate…). To claim the credit crisis as a black swan is to abdicate all responsibility for its occurrence. I argued that bubbles are a by-product of human behaviour, and that human behaviour is sadly all too predictable.
The details of each bubble are different but the general patterns remain very similar. As Marx said, history repeats itself, the first time as tragedy, the second time as farce. It is the general pattern of debubbling that I wish to explore this week, particularly in the context of the market's apparent attitude that the worst of the problems seem to be behind us.
Observer – What you write implies that you believe that Nortel's woes are associated with market events, whether they be predictable or not.
I don't believe that this is the case at all. If it were true, the whole segment would be in the same boat and that is most definitely not what's going on in the market.
Stock value is not the only measure of the health of a company and I didn't say that it was. The strategy and portfolio strength is even more important. Unfortunately for Nortel, the weakness in their strategy and portfolio is WHY their stock is so low, IMNSHO.
The current leadership team should go run a great big factory somewhere. That's what they do best. They are in no way equipped to turn Nortel around. Yes, I know, I'm a broken record.
Observer
You guys need to read about bubbles and busts and then think about the context in which Nortel and everyone else operated. Also you need to examine whether stock price is the best measure of a company's value. With hedge funds and other financial instruments playing with the derivatives market, stock price is no longer a good measure of any company's performance, especially in a secular bear market. I recommend the following:
The Road To Revulsion
by James Montier
A couple of months ago I wrote a note arguing that events unfolding the in the US weren't a black swan but rather an example of a predictable surprise (see Mind Matters, 13 March 2008 http://sgresearch.socgen.com/publication/strate…). To claim the credit crisis as a black swan is to abdicate all responsibility for its occurrence. I argued that bubbles are a by-product of human behaviour, and that human behaviour is sadly all too predictable.
The details of each bubble are different but the general patterns remain very similar. As Marx said, history repeats itself, the first time as tragedy, the second time as farce. It is the general pattern of debubbling that I wish to explore this week, particularly in the context of the market's apparent attitude that the worst of the problems seem to be behind us.
Observer – What you write implies that you believe that Nortel's woes are associated with market events, whether they be predictable or not.
I don't believe that this is the case at all. If it were true, the whole segment would be in the same boat and that is most definitely not what's going on in the market.
Stock value is not the only measure of the health of a company and I didn't say that it was. The strategy and portfolio strength is even more important. Unfortunately for Nortel, the weakness in their strategy and portfolio is WHY their stock is so low, IMNSHO.
The current leadership team should go run a great big factory somewhere. That's what they do best. They are in no way equipped to turn Nortel around. Yes, I know, I'm a broken record.
Nortel’s Statement
Nortel has issued a statement about the RCMP laying charges against three former executives: Frank Dunn, Doug Beatty and Michael Gollogly:
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