Is Nortel Ripe for a Takeover?

Well look at that, Nortel is actively trading on the NYSE today. Looks like Yes4appl was spreading false rumors about Nortel being halted and in default of market capitalization rules.

Is anyone surprised that Yes4appl is spreading false rumors about Nortel?

The Nortel-Must-Be-Destroyed Cult strikes again with more bogus BS.

nortel is now a small cap company by definition. small cap is defined as a co with market cap less than 2 billion.

Here we go again, more BOGUS information presented to the purpose of damaging Nortel. Is anyone surprised? I'm not!

Read this Press Release from Oct. 24th related to a different company being advised of potential de-listing and compare against Nortel. http://www.breitbart.com/article.php?id=prnw.20081024.NY41526&show_article=1

Has Nortel traded below $1.00 per share for 30 consecutive trading days? -- NO

Is Nortel's market capitalization below $25 Million over a 30 day trading average? -- NO

All this is is more crap from the Nortel-Must-Be-Destroyed Cult for the purpose of damaging Nortel. Shameful!

Here we go again more BOGUS information presented to the purpose of damaging potential NT investors. Is anyone surprised? I'm not!
I know this and other boards where DieHardNTstockLongs will post any lie to paint rosy picture for NT stock future.
OK Tongue.In.Cheek
You posted a link to support your idea.
Don't you see you are just silly expecting the same numbers for NT stock?
First Your stock trades on Pinks,
Second, it was small company and the required market cap for that company was $25 mill.
The ball is in your corner with my question
What is required market cap for NT to be listed on NYSE?
You have to realize one day that NT cannot just do another 1:10 rsplit to make the stock look healthy!
In other words, $500 mill market cap for Nortel corporation is not a healthy number!

Mark
we concluded on the other board that NT default on market cap requirements to be listed on NYSE.
can you dig out something on that, pls?
It looks like NT stock has been halted. Can you check your sources?

Mark or someone knowledgeable with Nortel's debt structure.

Please provide the break down of Nortel's $4.47 billion dollar debt .... there might be multiple due dates in the short, medium and long, please provide a complete list.

Short term debt $___________ at ___________ (%) due ___________ (year, month, day) ___________ currently trades at ___________ (price)

Medium term debt $___________ at ___________ (%) due ___________ (year, month, day) currently trades at ___________ (price)

Long term debt $___________ at ___________ (%) due ___________ (year, month, day) currently trades at ___________ (price)

I understand that some of the long term debt is trading at a discount. Approx $70 per $100. If so, why wouldn't Nortel take $700,000,000 (of the $3 billion cash) and retire $1,000,000,000 ? These kinds of returns are not available in the telecom industry and it saves the servicing of the $1,000,000,000 debt.

Also, if IBM or Motorolla (etc) was interested in buying Nortel why wouldn't they buy the bonds/debentures at significant discounts ($0.70 on the $1.00) now and then retire the debt once Nortel is part of them.

Looking forward to your reply.

Where / when was this news announced? There has been nothing on the internal comms...

The dream team that was brought up is leaving... one after the other...

Isn't that a line from chicken little?

yeap
CMO, Sales President, CSO, Services President....falling

yeap
CMO, Sales President, CSO, Services President....falling
TheSkyisFalling
re
What you mean falling?

Dietmar Wendt was president, Global Services
for Nortel.
Lauren Flaherty was Chief Marketing Officer
Was she the one creating CSCO Tax AD campaign?

They would be the ones who could integrate Nortel into IBM if that rumor was correct. If you are right it means no Buy Out by IBM

NT pps reaching $1.05 today shows that talks behind the closed doors are ugly!
NT is trading at the $1 level or 10 Cents pre rspit at $500 mill market cap.
I think Q3 CC would be the last one for Mike Z. as well. There is no reason for him to stay.
All that 3G exit strategy (leapfrog), focusing on WiMax and LTE, refocusing on WiMax and LTE (de-risking!), monetizing assets, single digit growth false expectations... the list of failures is endless
How he could not know that 4G was just a buzzword and will remain buzzword for another 4,5 years?
How he could not know that Nortel cannot grow with new orders declining 25% in Q2?
His failures are well presented on NT stock chart.
It's clear for me from the investor's point of view.
He took NT from $36 to $1
He will get his millions no matter what anyway.

When/where were these departures announced?

There's been no news about senior executive departures. I have no idea what TheSkyisFalling is talking about other than wildly speculating. If he knows anything otherwise, do share.

Mark


Your blog is being infiltrated by paid bashers and those with an interest is seeing further shareprice declines.

You should apply certain criteria for ayone wanting to post on your blog,this way it will also help to preserve a level of integrity not seen on many message boards.

yeah right.... just wait and see...

OK Proto, Ex-Nortel, we get it, Nortel is going bankrupt.

It's all part of the Nortel-Must-Be-Destroyed Cult routine that's been going on for 3 or 4 years. To bad they don't understand that much of Canada's 911 system runs on Nortel as it seems they want it to be compromised too by their non-stop bashing of Nortel, regardless of what they do.

No, T.I.C., it's more of a Nortel-Is-Being-Destroyed dialog. It think everybody involved has lost something due to the ongoing demise of the Nortel, whether it be jobs, investment, or whatever. Given a choice, I think all would rather see Nortel turn around and grow back the value it has lost.

The vitriol is directed at the leadership team that has destroyed the company and in my opinion every bit of it is earned. It's been an ongoing train wreck of poor hiring decisions, cronyism, lack of vision, bad decisions, and - most recently - board inaction. The 97% percent loss of value in Nortel shares during this cabinet's time on the job cannot be blamed on anything or anyone else. Some loss of value is undoubtedly due to inherited problems and some due to market conditions - but not >97%! A lot can be fixed in three years if you know what you're doing.

My amazement now is in the inaction of the board of directors. At what point does inaction become negligent? At what point does gross negligence become criminal?

I understand people being upset and frustrated with Nortel Executives and share price performance. I do not understand why some manipulate information and facts for the purpose of making Nortel seem wrong and attempting to damage them.

Those that manipulate clearly have a zealous motivation to see Nortel detroyed. Some of the false and misleading information posted here is downright stupid.

I find that many of the rants here post hostorical data (over and over again) that is depressing but true. When I submit negative posts, I do it to keep visibility on those who need to be held accountable for driving a once great company into the ground. I don't think any of the Nortel leadership is acting maliciously and I believe they'd much rather be leading a turnaround, but they clearly aren't capable of it. So now we all need to extend our focus to include the board, who are all asleep at the wheel.

I do recognize that in the last week or two at least one troll has arrived and is posting all kinds of ludicrous stuff under multiple handles. I would be fine with Mark banning the posters that are obviously posting nonsense (I don't mean negative or contrary opinions, I mean nonsense).

Mark,

Don't forget their pension deficit which will be ballooning given falling interest rates and stock markets. Low interest rates mean their obligation goes up and stock market losses takes their assets down.

The deficit could easily go from $1.1B at the end of 07 to >$2B now. Unless an acquirer can find a way out of this, they would have to assume they are taking over this liability. An extra $1B in liabilities = $2 lower price to shareholders.

At this point in time, there are no public or private buyers for Nortel. No one is willing to put up any cash in a global credit crisis to buy a bloated, money losing, cash burning company with a poor management team and a portfolio of average and bad products. Nortel's equity is worthless and its debt is distressed - no company can justify buying such a disaster in this economic environment.

Furthermore, any buyer would have to perform radical surgery in the worst environment to perform radical surgery. Laying off about 15,000 employees with severance packages, attempting to sell assets in an environment where there are no buyers, negotiating down outlandish exec pay packages, closing down numerous facilities, and dealing with a number of governments over the potential re-construction of Nortel.

Why would any buyer do this when a bankruptcy court will sell any valued assets for pennies on the dollar without the headaches of having to deal with lay offs, facilities shut downs, negotiating with distressed bond holders, or dealing with the incumbent management team and BOD.

Nortel is a zombie company waiting for a bankruptcy court to bury it.

I believe they would rather see it go to zero than sell it as a whole.

I do not know if they want to maintain their exorbitant pay practices as long as possible or whether the accounting (worse every time counted and its repair finally monitored by the SEC) has problems they would disclose as readily as their endless Flextronics amendments; years after selling their manufacturing.

Also, what credibility is there with the buyer knowing exactly what he is getting.

I am firmly convinced they will fight tooth and nail to prevent selling it They never did consider the shareholder in events where "Nortel’s board of directors have a fiduciary duty to serve the interests of shareholders, and given state of affairs, they would to have to consider an offer." They don't consider offers on selling the whole company. They have stated in the past they will not sell it and they will be the acquirer not the acquiree, it will remain a Candian co. etc... They do not want to sell their cash cow or skeleton riddled evil empire I mosdt strongly suspect.

This is why I disagree with an analyst who said they will be sold or severely restructured by Christmas. They won't be sold, they can even sell MENs.

Even if some one did want them, which is astronomically unimaginable .Why now than later when they can buy it liability free at a firesale after they fold.

Maybe keep selling assets to buy another day but never outright sold. Again, who knows what they would be buying with their credibility. Even if they had credibility for the buyer to consider, they have more debt than cash and with their outlook they would be paying big money to lose even bigger money.

Their current 556M cap is less than what they would sell MENs for... to get an idea of how absurd this laughing stock is. Huawei is also foreign and I am not sure of the implications here even if they did want them and it seems given no offers on MENs they don't.

Cisco didn't even want a part of them years ago, not even a part of them, who on earth would touch it with a 10 foot pole today.

Brokers burning the midnight oil years ago also couldn't arrange a hostile takeover let alone today where it trades at a questionable discount for good reason, questionable enough that losing money is no discount at all.

Perhaps they can fire sale parts off after folding but certainly not before with their luggage and liabilities. Even then with competition and outlook, I question what on earth could be sold, ever.

Best thing about Nortel stock is their Put options, even if it does trade at around a buck.

As for what can be sold after folding, it will be a fraction of what they have and for peanuts, hardly worth a mention. Their largest asset is a tax credit, this is probably their greatest selling feature.

hopefully Z does not work again. hell probably scuttle the next ship.

Huawei will not be allowed to takeover. Whoever wants to buy will still have to put in $3 billion (equal to cash on hand) and $6 billion for assuming debt. Thats $9 billion.

although market cap it does not make sense for someone to come along and acquire Nortel for 750 million - 1 billion when it has 2.5 billion in cash. does not make sense Mark.

now Nortel is goign to be caught up in very bad timing. MEN will not sell. Nobody will acquire the company. Buyers will wait till this goes down, sell the debt for pennies on the dollar and then break up the assets.

for this bankruptcy has to happen. with the markets now its each one on their own to preserve cash and ride this recesion out.

Nortel will probably buy some of their own debt back, reducing the debt and interest associated with it.

As a present Nortel employee in the US, what is the likelihood Huawei will be allowed to take over Nortel? Or that being asked, how could they be allowed to by MEN? Being the mass amount of Nortel optical products on military bases, government facilities, banking institutions, colleges, etc. I’m obviously not oblivious to the fact that Nortel is a Canadian company, but there has to be some sort of restrictions in place to keep this from happening – right? Huawei tried to buy 3Com and it was stopped for the same reasons. How can a company that is a subsidized by the Chinese Government even be allowed to be in the talks to purchase any company in a capitalist society? That's not Free Trade in my book. I guess like most everyone else we will wait for the worst and hope for the best.

MEn_E,

As for waiting for the worst, you are somewhat lucky to work in the MEN division because the layoffs SHOULD hit you last. while your division is being shopped around

The logic being that NT should allow the buyer to determine all personnel decisions.

I'm aware the layoffs have already begun at least in the continental US.

NW
I guess the feelings here at NT are everyone is going to get notice in the next few years. We're wondering if we'll get the same packages offered in previous layoffs. The question is when the money runs out - who gets to shut the door and turn off the lights with nothing to fall back on. No one wants to be that person :-)
Thanks for the encouraging words :)

If anything, blocking a trade from happening is definitely against free trade in my book, despite who the buyer may be. Free trade is a theory that it is free to trade anything to anyone without the government looking over your shoulders. But then by the definition of free trade, even the government should be allowed to buy or sell, and of course, the US government pretty much owns a certain share of AIG now. Obviously, no countries have completely free trade policies for reasons you specified above.

That being said.. didn't we see this post before? And do you really think that most of the shareholders will be willing to sell at 750m-1b? that's roughly 1.50-2.00 a share. If you were a shareholder with an average cost of 19.00, would you be really tempted to walk away with a gain of 50 cents a share after you've taken a $17/share loss? Face it Mark, you have to admit that your posts had at least a little bit to do with Nortel stock prices. After all, some of your posts are available to the public right?

I am not sure, but I think Nortel is being sold by holders becasue they need the cash ASAP. It seems to be happening with other strong companies.
As for Nortel being taken over, I don't think there will be much of that going on for the next few Qs.

If you are a long term bag holder, like myself, it is best to just consider the money lost. But a lesson learned, the hard way. The only good thing about this is that the Nortel "Turn around" story will (I hope) end Mike Z's future employment opertunities. The only sad thing is he (Mike Z) has made so much from Nortel he does not need to work again and he will be fine.

Apprently the nick name for this fellow is the Macedonian Cab Driver.
He sure has alot of cash in the back seat of that cab.