Thread: Nokia shares dive after sales warning
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olighak is offline olighak
2011-06-07 , 21:53
Posts: 519 | Thanked: 366 times | Joined on Sep 2009 @ North Carolina (Formerly Denmark and Iceland)
#83
Originally Posted by cBeam View Post
Ericsson, your posts are refreshingly optimistic (or hellofalot naive).

Here is how it went:
  • Nokia’s share price is on a downward trajectory since fall 2007.
  • Finally (way too late) the board decides to act and brings in a new CEO to turn the company around.
  • During the first few months on the job the share price stabilizes and increases (Qt-strategy with MeeGo and Symbian; S40).
  • Feb 2011: The CEO burns the platform, announces death of Symbian, and commits Nokia to WP.
  • Nokia’s share price loses more than 40% since the announcement. Fitch downgrades Nokia’s bond rating two notches to one notch above junk.
  • Nokia is falling off the cliff. There will be no more Nokia as an independent concern of any relevance pretty soon.

Is Elop the only culprit? No, but he is the CEO and was hired to make Nokia successful again.

40% down is no success.
Investors do not buy his strategy (20% drop after WP announcement 2/11) nor his execution (20% down after profit warning 5/11).
The downgrade in ratings will make it harder/more expensive for them to raise funds for the whole operation.

Puts them 2 steps closer to the grave.

Any more profit / sales warnings and they might drop further down in ratings. Then there´s no independent Nokia any more, Elop will sell them out, get a nice fat bonus and ride on to his next gig.
 

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