Doomsday Scenarios Emerging

By Mark Evans | Published: November 14, 2008

Talk about the rats fleeing the sinking ship, analysts are wasting no time distancing themselves from Nortel.

Yesterday, RBC Capital Markets’ analyst Mark Sue dropped his target price to zero, and now National Bank’s Kris Thompson has issued a research note suggesting that Nortel shareholders could be doomed because bondholders will have priority in the event Nortel files for bankruptcy protection, add that Nortel’s bonds are trading at 21% to 41% of their face value.

“If the bond holders are right, the outlook doesn’t look favourable for Nortel. Equity investors should take heed; if the bonds holders don’t make it out at face value then the equity shareholders are generally holding a worthless investment.”

Thompson said with Nortel quickly running out of cash, time is a huge issue. He suggests Nortel has until the end of next year to execute on a turnaround plan.

Source: National Post

Technorati Tags:

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]
This entry was posted in Analyst Coverage. Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.
← Older Comments
  • Clint

    Have to say this about this site.
    People who actually work at NT have their own internal blog that they check out infrequently, so my inside sources at CDMA tell me.
    The difference between the blatant propoganda, lies and deletion of facts and rumour from that site as opposed to the real time, “tell it how it is view” from this site is astounding.
    Apparently the NT internal blog is frequented by execs or managers waiting for or guaranteed golden parachutes, those who still think there is a future in enterprise and sales/marketing people who are totally out of touch with reality. Full of eternal optimists and cheerleaders apparently. Apparently the differences between the two sites is really quite stunning, comical and remarkable.

  • exnt2

    NT will go bankrupt but not in 2009. It can survive until early 2010. If there is no business unit sale, then it will go BK then.

    Its tough for anyone to buy NT. Nokia is a rumour. Layoffs have started, some I am told are being asked to defer until next year. Not a good sign.

  • Another Nortel Watcher

    bb – Don't quit your day job. ROFL.

  • broadbandbill

    ANW,

    Still at it, and loving it…–bb

  • yes4aapl

    It is just simple math
    Nortel has to cut about 8000 jobs in total to come closer to profitability and reality
    I estimated they would need around $1.6 bill for that round of restructuring.
    How about that?
    or if you are still not convinced
    what about Pension Fund deficit?
    I estimated that they are around $3 bill in the red or more, I say or more!
    Answer that one Tongue in your chick, Sir

  • fx

    Nokia-Siemens negotiations with NT confirmed. Deal not closed. NSN wants larger number of layoffs prior to acquisition. NT talking to Ericsson now. NT wants a higher price but cant get it.

  • yes4aapl

    I don't remember if I have posted it before
    Why would you use so many IDs?

    aliases

    * abc
    * coverdrive
    * nbody
    * HOOAH!
    * coverdrive
    * kaiser
    * Corona
    * EarnEntreCredit
    * fdd
    * gfdgdfgfd
    * Go private
    * Venu
    * neuro
    * ali
    * London
    * Lee
    * from the law
    * Dr. Dib
    * seo
    * Ramki
    * coverdrive
    * Sathish
    * pune_bikez
    * cruise from Canada
    * Lokyz
    * JoJo
    * Charles Ulmer Farley
    * krish
    * OKS
    * illegal
    * NA
    * aaaah!
    * Jimmy
    * phil
    * alex
    * Anon
    * Томас
    * Nunuv Yurbiz
    * Bella
    * C
    * tina
    * abc
    * J
    * unanimous
    * La L'Heureux
    * Arsenalfan
    * Mike
    * Mark
    * haha
    * XCRunner
    * hot_payoyoy
    * 과객
    * Anonymous
    * Business
    * billy
    * rhodydog
    * nt_man
    * wing

  • Another Nortel Watcher

    Too funny. Confirmed by whom?

  • Another Nortel Watcher

    Now we have confirmation that we should ignore anything you post. How bout that?

    Thank you, yes4aapl.

  • Clint

    And F*** you too.

  • puddintane

    “what my problems are that mark reports some facts, even multiple times, and other facts not at all. let me put this like you're a three year old: “your daddy was in an accident” and “your daddy was in an accident, but he's okay” send out messages with two very different tones, though both may be valid facts.”

    And not a few people just keep asking for second opinions until they hear what they want to hear.

    The word “okay” is a highly subjective term to a three year old, I expect an octagenerian's is definition of the word regarding, say, their health is quite different.

  • http://nortelinsider.wordpress.com/ Desk Jockey

    It's because stupidity has many faces.

  • bms

    At it again Clint.. When cornered you provide an insight into your real character. Get a life!! or at the very least have the courage of your convictions. Thanks yes4aapl

  • Tongue.In.Cheek

    No one should be surprised that you would invent a totally fictional situation in support of your claims. Perhaps you should read page 58 of their Q3 10Q document to get your numbers correct, rather than the clearly false information (as usual) you are spewing here.

    On this page in the 10Q, it states that the cost of restructuring the 1,300 positions would be approx. $130 Million, which equates to an $100,000 average per employee. Your fictional math, which you call simple, equates to DOUBLE that amount, or $200,000 per employee. You have also stretched the number from 1,300 to 8,000 people yet offer nothing in support as to why they would need to restructure 8,000 positions.

    So, your simple math exercise is now shown to be a completely fabricated piece of crap.

    On Pension Fund deficit, companies are allowed 5 years to make up the balance, correct?

    And as for your attack on my name, stick it where the sun don't shine Princess. You are the one repeatedly creating lies here.

  • nt_man

    Actually, I can't explain it because all thsee names aren't mine. I've only written stuff twice and they were both on AAN, as nt_man. I'm not Mike or Mark or god knows what that one is saying.

  • nt_man

    Not always

  • http://nortelinsider.wordpress.com/ Desk Jockey

    It's okay

    Forgetfulness often accompanies multiple personality disorder or schizophrenia.

  • notafan

    i had a theory about you reflecting yourself in your name calling but apparently its not a theory anymore because you proved it.

    and i think you proved nt_man's statement about you polluting aan as well. well done mate.

  • yes4aapl

    You have also stretched the number from 1,300 to 8,000 people yet offer nothing in support as to why they would need to restructure 8,000 positions.
    =============
    re
    8000 positions is not only my invention. You can find articles with analysts estimations of 5-8000 job cuts needed right away.
    Why?
    New orders show it!
    New orders decline as fast as $500 mill a quarter.
    CDMA declined not with 3% speed as Nortel expected but 30%
    Costs are always higher than Nortel expects, and savings? what savings?
    Nortel supposed to be profitable looong time ago when Owens restructured Nortel!
    and what about Pension Plan deficit you don't understand?
    More of your diversion plays?
    You cannot play your stupid games with me. And when you call me a liar you should provide examples Sir.
    If you don't understand simple math or simple logic you will accuse anyone of posting lies. But it's your problem not mine.
    One thing is sure. You were wrong about NT stock and company for very long time so why do you think I lied if my NT targets are reached each and every year?
    When did you create Nortel_will_survive alias? 3 years ago?
    NT was $36 at that time
    Today NT market cap is $300 mill! It does not look like Nortel_will_survive!
    and as Duncan said.
    All the doomsday predictions professional analysts wrote are used by competition to get Nortel's customers. What Nortel should do about that? Deny BK?
    or just do it quick!
    I think, using BK sooner would convince some customers to stay and it would save many jobs!

  • yes4aapl

    nt_man aliases?
    He denied to use them.
    Can we ask Mark to check if those aliases shown by Disqus are correct?
    http://disqus.com/people/4adcca49b3b1e5a08ac202…
    Mark is it possible Disqus shows wrong list of aliases?
    Can you check nt_man claim that he did not use those aliases?
    Clint admitted using all his aliases in a vulgar way.
    I don't have aliases because I am proud of my Yes4AAPL which is more than 5 years old with perfect predictions about NT and AAPL.

  • nt_man

    I would be delighted if some can check. This is my 5th ever DISQUS post and all of them as nt_man in AAN.

    Desk Jockey, I am seriously being honest and I do not need your sarcasm

  • nt_man

    Looks like I've now got another session/ID for my comment above… Regardless, my claim still holds. I have been using the same browser on the same computer on the same network for all my posts.

  • nt_man

    I've figured it out…. I've used used a random email (abc@abc.com) in hopes to hide my identity (except for the post above) and that resulted in attaching my post along with other people who have posted with abc@abc.com. yes4aapl, I will be using my real email from now on. (hopefully my identity will be kept private)

    Sorry, it looks like I'm polluting AAN myself. It'll truly be my last post for a while.

  • http://nortelinsider.wordpress.com/ Desk Jockey

    Thank you for your honesty. And I am sorry for my sarcasm. I just do not enjoy being attacked without reason.

  • yes4aapl

    I've figured it out…. I've used used a random email (abc@abc.com) in hopes to hide my identity
    —–
    re
    So good to hear your memory is back!
    Cheers

  • hangin_in_there

    No. You were wrong.

  • hangin_in_there

    No. You were wrong.

← Older Comments
  • TwitterCounter for @markevans
  • Seeking Alpha Certified