Comments on: Stewart on NT

By: The Week in Review

The Week in Review — Sat, 16 Aug 2008 12:55:36 +0000

[...] Finance Most Popular Posts Stewart on NT It’s a Buying Frenzy! Some Good News for Nortel Nortel Makes Motley Fool’s Deathbed [...]

By: less

less — Fri, 15 Aug 2008 01:14:40 +0000

Funny, I bring up the NT ticker yet again and click on the 10 year range:

http://finance.google.com/finance?q=nt&hl=en

Hm. NT stock flatlined after the 2000 spike. Underneath the ticker are listed "Related Companies". Each one experienced the same spike, yet they've all recovered to some extent, compared to NT. Whats their excuse?

By: less

less — Thu, 14 Aug 2008 21:14:40 +0000

By: Tongue.In.Cheek

Tongue.In.Cheek — Thu, 14 Aug 2008 15:45:37 +0000

So sad - you are right when you state that Nortel's Long Term Debt is currently greater than their Cash on hand. However, shouldn't we also look at their debt repayment schedule before making predictions that "Nortel will go bankrupt and it is likely going to be sooner than most people at Nortel think."

From their last annual report, the debt repayment schedule looks like:

2009 - $26 Million
2010 - $26 Million
2011 - $1,027 Million
2012 - $604 Million
Thereafter - $2,109 Million

We see that between now and the end of 2012 the total debt payable is $1,683 Million against a current cash balance of a little over $3,000 Million.

Given these facts, what's your call? When do you expect Nortel to declare Bankruptcy?

By: less

less — Thu, 14 Aug 2008 13:48:22 +0000

My local phone company filed long ago:

"Like a number of telecom companies that went through the high-tech meltdown in early 2000, Waynesboro, Va.-based Ntelos was wounded but did not die. After an aggressive expansion into the wireless business in the late 1990s, the debt-laden telecom took Chapter 11 bankruptcy in March 2003 and emerged six months later as a private company.

The new shareholders are the former bondholders. "As part of the restructuring agreement, they are equity holders of Ntelos," said Mike Minnis, director of public relations. "When we filed for bankruptcy, we had $900 million in debt, but when we emerged, it was down to $300 million."

And, guess what, many of the Playas are still in charge here.

By: So sad

So sad — Thu, 14 Aug 2008 02:36:52 +0000

After all this hubris about Mr. Stewart's column, I had to read it. (Mr. Broadbandbill, I think you misread his column, but you definitely show class in the apology below). I agree with Mr. Stewart. Now, let's get to the bottom of this – Nortel will go bankrupt and it is likely going to be sooner than most people at Nortel think. Their current debt position is greater than their cash, they have no room to manoeuver, their debt carrying costs have significantly increased, and their legacy CDMA business is falling off a cliff and they absolutely have anything close to replace it. Shame on the leadership at Nortel ! Mike Z. and his cronies came to Canada either thinking the situation was not as bad as they thought (nice due diligence) or they underestimated the people running the place and perhaps felt they could fix the problem with a few tweaks around cost and process management. There is absolutely no strategy at the top of the house and they don't have the guts to do whatever most people think they should do – shrink the business significantly by selling off large chunks of their legacy business and re-invest the proceeds in future growth businesses. Only problem is – I don't think they have a clue on where to place their bets. This of course is a highly risky strategy but right now, Nortel will die a slow death (maybe not so slow???) and by putting a knife to the business, the patient might survive – albeit a smaller one, but far more profitable than the current business model will drive. This is a very sad situation and unfortunately, no matter which way the mgmt goes, Canada will lose another tech heavyweight (ok, maybe lightweight) and the jobs that go with it!

By: broadbandbill

broadbandbill — Tue, 12 Aug 2008 01:27:06 +0000

I heard from a very gentlemanly Duncan Stewart noting that he is indeed bearish on both NT and CDMA, (even challenging Richard Lowe during Analyst Day on their stated 4% CDMA sales decline) so I take this opportunity to publicly apologize to Duncan for my earlier comments (see below). For info, I have already done so in private. In any event, it looks as if I was the one being anal. Not the first time, won’t be the last…–bb

By: NAJAQ-NotAnlystJstAskinQuestns

NAJAQ-NotAnlystJstAskinQuestns — Mon, 11 Aug 2008 20:06:46 +0000

Hmmm…. Time to leave the boat ? Will management let the business go down, or will they sell some parts to generate cash ? But which part can they sell ? Who's interested ? I believe NT wants to become a “solution” provider… but what's that worth ? what does it mean ?… Is their 100gig solution their next main focus ? What about metro ethernet… Let's just hope their recent increased PR will get them some new customers…

By: Apple

Apple — Sun, 10 Aug 2008 22:31:48 +0000

bb I concur with you as you know something about G Orwell as I do

By: less

less — Sun, 10 Aug 2008 21:54:43 +0000

Its an agonizingly slow and painful death indeed.