Nikos on NT

+ there's no such word as “gotten” ;o)

Significant restructuring + Much narrower focus (Enterprise) + Strategy for growth & profitability + An update on sale of MEN can not equal to only 10% of HC reduction. The annoucement on Monday will be BIG and will hit hard.

Never mind targets that have been shattered for years, always higher than currently trading, and always revised lower every year dancing in unison with its ongoing lows. Now at 12 cents presplit when last neared folding at 43, and targets as low as a nickle …5 cents presplit.

There is a stark contrast between Theodosopoulos at UBS and Scotia Capital’s Papageorgiou's opinion.

Targets are all over the map lately from a nickle to a quarter per share presplit,
50 cents to $2.60 is over a 5 time difference
…and who do you think will be right in light of history, catalyzing trend, and deteriorating outlook…bad news accelerates now

They depend the sale of MENs for liquidity sake!
The post indicates no one wants the headcount, it is not easy to sell for cash in this economy and they have not sold it.

Even the more optimistic analyst in this article “recommends investors avoid the stock”… so what good are targets if over 100% return is to be avoided from today's $1.20's to $2.60.

If no one wants the head count and Nortel does not want the heads where a sale does not look promising for the analyst to base his best case projections on, so what then and when?

Look at cash burn and do simple arithmetic to see clearly:
“UBS estimates a cash burn of US$686-million in 2008, and US$700-million in both 2009 and 2010.” K?

now ADD YEARS 2008/9/10 TO FIND:
686M+700M+700= 2.086 Billion CASH BURN

$2.6B CASH NOW – 2.086B CASH BURN (above) equals around 500M CASH LEFT!

if, that is if, they can even sell MENS to add a further $500M = around 1B he refers to
(and never mind selling it for 3 times that with a current market cap of around 595M, sorry monetizing, like they are trying to derisk LTE as they did WiMax)

“This would put Nortel in a “tenuous position” with US$1.0-billion of debt due July 2011. At the same time, the forecasted cash burn would yield cash of US$1.3-billion at the end of 2010, assuming MEN is sold for at least US$500-million.”

See arithmetic now?

If they even sell MENs as they were as lucky to do with UMTS as Lucents was to be acquired, sale leaves only around a billion in it's best light and still likely to to fold with their cash burn and deteriorating outlook.

Look at 2009 alone unable to sell MENs, as I believe cash burn is growing. Even at $686M+700M = almost $1.4B, from 2.6B cash now still leaves onlt around a billion by 2009… worse than Q206 cash and before printing $4B in Nortel paper /selling so many assets to live another day.

With aging CDMA's commencing steep decline, that accounts for almost all their earnings (analysts called their “cash cow” or “gravy train” accelerating in decline faster than Nortel indicated), and when already losing money for a decade resorting to printing billions in Nortel paper / fire selling assets /cutting benefits /ongoing layoffs ill affording severance /53% of their pensions vested in now tanking equities needing cash / to trying to sell MENS just to live another day, etc., where even “etc.” is an understatement, perhaps an even more dire picture looms in the not too distance future than analysts best case scenarios who do not recommend buying this stock anyways.

I find even all this it its best light, challenges are escalating into this 3 to 5 year six sigma growing by shrinking amid endless other failed aspirations and contradictions.

Sorry relentless cheer leaders but those who have a pessimistic outlook do not hide under bridges, too many abandoned this stock to disregard charts proving it is a dog. Nortanic;'s endless /insurmountable woes sometimes justify lengthy/verbose diatribe just to explain them, even in their best light. No happy talk today, sorry.

..I believe Nortel is toast at this point and the above numbers clearly prove it.

I'd love to see them turnaround, even as a smaller company, and perhaps offer consumer products as they once had done, or like their peers do… but this is but a pipe dream nowadays accelerating to zero in a handbasket.

Well said, well said. Long term debt is the $4-billion gorilla in the room. Will those soon to be laid off be the “lucky” ones, that is, lucky to escape from the sinking Nortanic ship with a lifeboat of severance?

Want to bet UBS will be gone before Nortel?