NT Down 50% Today

By Mark Evans | Published: September 17, 2008

Nortel shares plummeted 49.4%, or $2.62, to close at $2.68 today on volume of 37.9 million shares in New York – six times the normal trading average.

Keep in mind, the stock is now trading at 26 cents when a 10:1 stock consolidation is taken into account.

Nortel now has a market capitalization of $1.33-billion, which works out to 1/8 of Alcatel-Lucent’s and 1/10 of Motorola’s.

Nortel has long-term debt of $4.49-billion and expects to have cash reserves of $2.6-billion to $2.9-billion by the end of Q3.

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  • Another Nortel Watcher

    Also interesting to note that Nortel closed at a market cap of about 1/6 of the amount that was paid for Avaya.

  • yes4aapl

    Not a surprise to me and I know many analysts expected that too.
    Lower revenues in 2008
    I saw it at Q2 CC so I am puzzled why Mike Z chose to misinform public, investors about single digit growth for the company?
    How NT would expect growth of business if new orders dropped 25% in Q2 2008 and with just the linear extrapolation into Q3 another $500 mill and Q4 another $500 mill gives more than $1.5 bill drop in new orders during 2008.
    2008 will look like a flier in comparison to 2009!
    and what have I posted here about new job cuts as necessary? I said mark my words. Check who laughed at my post.
    Selling the best assets and giving up on 4G __Mike/s big mistake in marketing the leapfrog__ is another sign of Nortel's troubles.
    My family and friends knew that. When SEC will say it's enough?
    Looks like the BK will be earlier than criminal trials. Public's been waiting for trials since 2004.
    Oh, and pumpers from Nortel like Bo Gowan, The Psychiatrist or others can feel free to post my wrong predictions or lies if they can find any! I know that I have been just right and honest.
    It would be nice to see them coming here and admitting they were just wrong.
    Is it too much to ask for?
    Is the last $3 bill in cash at NT a big lump of money?
    I think so. Mike should be pushed away from it. He has failed on dozen or more occasions. Why shareholders have to see him still loading his packets when they are suffering big losses?

  • protosphere

    “Nortel has long-term debt of $4.49-billion and expects to have cash reserves of $2.6-billion to $2.9-billion by the end of Q3.”

    They also have the largest pension deficit in Canada.

    Last quarter they reported $3.07B cash.
    They also printed a whopping $4B in Nortel paper only a few years ago ($2B bonds+ $2B in dilutive notes as the stock tanks) to get an idea of the rate of cash burn /negative cash flow.

    Printing paper and selling assets while cutting/exporting jobs just to live another day has warn thin. They can't catch up and are selling even more in their linear death spiral it seems.

    An all time low of 26 cents extreme 10X presplit is lower than the last time bankruptcy fears surfaced at 43 cents. Is this strike 3, post bubble decline and post fraud?

    Now how long will it take to burn $2.6B cash given an area that accounts for almost all their earnings commencing dramatic decline (CDMA), as Q2 indicates a 25% reduction in orders in this quickening trend.

    Dare I suggest the worse is yet to come and never was behind them any more than $20 was a buying opportunity or 7 was an averaging down one.

    Heck is their long extended repair of accounting the SEC finally monitors even fixed yet or are their more horror stories behind “deferred” revenues.

    No WiMax, no UMTS,, perhaps no metro ethernet which includes optical and carrier ethernet productsand soon by the sounds of things no Nortel in the not too distant future for plenty of cause at this escalating rate of ongoing bad news for years.

    I wish there was something positive to say but in reality and truthfully, there isn't.

  • exnt

    Mark Evans, you need to start a new blog since Nortel is about to go under. How about something all Canadian like “All About Tim Hortons”. You could have special sections like “Double-Doubles of the Day”, “Chocolate DIpped Dimwits”, “Timbits Tattle Tales”, and “Roll up the Rim to get your fingers dirty”.

  • http://www.allaboutnortel.com Mark Evans

    Exnt,

    Not a bad idea! Maybe a RIM blog. They seem to be doing fairly well these days.

    :)

  • bankrupt

    Shame on Mike Z. Tellabs is now worth more at $1.59 billion.

    These arrogant fools will not even takea paycut let alone resign for incompetence.

  • Should have sold in 2004

    I bought 500 shares today at $4.30 Cdn…unfortunately that dropped to $2.76 Cdn; so a loss of about $800 when I thought it had bottomed out. Now I have a total of 1920 shares with a cost average of about $13.25 or $1.32 pre-split. If they go under my total loss will be about $25K Cdn. I should have sold out in Feb 2004 when my 2200 pre-split were worth $10 Cdn and would have tripled my money in 3 years.

    Do you think I'm crazy people?

  • Observer

    Yes.

  • Observer

    By the way, Nortel is being naked shorted. It will soon go to zero or near it. The hedge fund hitmen are out in full force.

  • Justice

    bankrupt – pay cut? you poor misguided soul. no no no they need another 20% pay raise. Pack your parachute employees and bail out with a severance package as soon as possible (ps don't forget to cash out your pension if there is any left – that is probably underwater and short of funds too).

  • Disgruntled Ex Nortel

    it would be a logical progression, seeing as how it has become the subsequent employer of us “strategically rightsized”

  • Novice Investor

    Time for a 50-1 consolidation to attract “Institutional” interest …. Mental Institutional that is !!

  • more

    Me too.

  • exnt

    Is it true that Nortel is selling Carling campus to Tim Horton's and it is going to become the world's largest coffee and donut drive-in?

  • bankrupt

    yes. get yourself committed. I got out though lost most of it. we all were crazy belivieving the shit.

  • bankrupt

    Z uses a macedonia-english dictionary er! printed in China.

    so these words appear as synonyms.
    downsize = rightsize = nosize.

    being the ruthless businessman he is, he took the quickest path from his lessons in his bible book 'the path of greatness'

  • lostmoney

    note to self. sell stock. well if only I had read those notes I made for 7 consecutive years.

  • less

    Still, global Jim Crow laws state that Z is an American, first and foremost.

    The best refuge for a scoundrel is the US.

  • yes4aapl

    Shame on Mike Z. Tellabs is now worth more at $1.59 billion.

    These arrogant fools will not even take a pay_cut let alone resign for incompetence.
    ====
    re
    Look Mike Z and R Lowe are proud of selling Nortel cheap! They will get their pockets full of $$$ anyway it goes…

  • yes4aapl

    It says 10 months ago
    The question_challenge is the same.
    Show me one post I was a liar or wrong.
    ——-
    —-
    00000000
    =========
    Not a surprise to me and I know many analysts expected that too.
    Lower revenues in 2008
    I saw it at Q2 CC so I am puzzled why Mike Z chose to misinform public, investors about single digit growth for the company?
    How NT would expect growth of business if new orders dropped 25% in Q2 2008 and with just the linear extrapolation into Q3 another $500 mill and Q4 another $500 mill gives more than $1.5 bill drop in new orders during 2008.
    2008 will look like a flier in comparison to 2009!
    and what have I posted here about new job cuts as necessary? I said mark my words. Check who laughed at my post.
    Selling the best assets and giving up on 4G __Mike/s big mistake in marketing the leapfrog__ is another sign of Nortel's troubles.
    My family and friends knew that. When SEC will say it's enough?
    Looks like the BK will be earlier than criminal trials. Public's been waiting for trials since 2004.
    Oh, and pumpers from Nortel like Bo Gowan, The Psychiatrist or others can feel free to post my wrong predictions or lies if they can find any! I know that I have been just right and honest.
    It would be nice to see them coming here and admitting they were just wrong.
    Is it too much to ask for?
    Is the last $3 bill in cash at NT a big lump of money?
    I think so. Mike should be pushed away from it. He has failed on dozen or more occasions. Why shareholders have to see him still loading his packets when they are suffering big losses?

  • yes4aapl

    Masrk Evans
    Why don't you chose AAPL?
    I beg you..
    Make AAPL a Canadian issue, pls…

    I know that, there is no competition to AAPL
    How long I've been using my ID?

  • yes4aapl

    Masrk Evans
    Why don't you chose AAPL?
    I beg you..
    Make AAPL a Canadian issue, pls…

    I know that, there is no competition to AAPL
    How long I've been using my ID?

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