Originally Posted by 9000

You assumed the current stock price x no. of stock issued in a single exchange market = total present market value of the corporation. This is common mistake that a student would made in an examination.

Say, It's not like you can buy the entire Nokia if you've 24.5 billion on your disposal. The stock price would be hypering up immensely once you acquired more than 5% of the total shares in the NYSE.

There are many other factors taking into consideration. Options issued for one is a major factor that affect the present market value.

Also, you assumed stocks exchanged in NYSE represent everything in Nokia. There might be many major stakeholders of a corp outside of one single exchange market. Therefore, we always rely on financial evaluators to perform valuation of a corp, or buy some expensive financial reports.

I got this figure from a paid european financial report I read weeks ago. I didn't look into detail how they come up with this figure and I believe their valuation would be biased for a Finland company, but I don't own and has not intention to own any Nokia's stock anyway.

Originally Posted by 9000

Sane acquisitor would not 'test the market' this way on M&A a listed company listed. It'd happen in Japan, where percentage of privately owned shares are very high, but it is rarely seen in other exchange markets, where there are regulations on the percentage of shares a single entity could own.

During the takeover (we'd normall announce as acquisition), the total present value of a corp is being evaluated, at this stage we really need to hire a group of real financial evaulators. The report would then be used in the M&A negotiation. The amount of M&A would be agreed and endorsed, options issued would then be executed.

Of course there exists hostile M&A, where negotiation is done under table with major stakeholders so as to acquired enough voting-stocks to influence the decision of the board to pass unfavorable deals to the rest of the stakeholders.

No matter which method, M&A of a listed company is not an easy task, and that requires highly experienced and talented mind to complete the deal. Elop is one of the famous figure in financial world who has the experience, capabilities and resources to close deals as such.

Financial sectors in general know what Elop is up to when he assumed the duty of Nokia. It's expected that the future strategies of Nokia would entirely head toward the M&A path, through, say, devaluation of stocks by periodic announcement of bad news, cutting down the divisions where company life is depending on, layoff of key personnels, etc.

Originally Posted by cBeam

I assumed nothing, I simply went to yahoo finance and looked up intraday market cap, which is number of outstanding shares times current share price. And this value is today around $24.4 billion.
And outstanding shares are all outstanding shares, regardless at which stock exchange the shares are traded. Not "outstanding shares issued in a single exchange value". You got that wrong.



Here you are partly right. This is the reason why an acquirer usually has to pay more than current share price to get the deal through. This premium can have a wide range, but common premiums are 20% to 40%. To get to your quoted value of EUR 100 billion you'd need a premium of more than 500%, which is out of the question.



Options do not change the present market value of a company, as the impact of the option is reflected in the present share price.



Not sure why you think to know what I assume. But you are dead wrong. There are many shareholders outside a single exchange. This is why market cap is calculated by share price times outstanding shares, regardless where these shares are traded.

But to conclude a long post: Go to Nokia's web site, under investor relations they show next to their share price in Euro and USD their current market cap:

http://investors.nokia.com/phoenix.z...rol-stockchart




One last thing:
Did you look at the date of the report? When the report was dated maybe October 2007 then the value might be right. At that time Nokia's market cap was around EUR 100 billion. Today it is less than EUR 18 billion. That's quite a crash.

Originally Posted by Frappacino

I never said acquisitor does things this way. Of course they wont - they wont toss a figure out there and then alter it willy nilly. Of course a team goes in and does evaluations and you start with that number.

But until the deal is sealed, there is no "single" price - as anything in the financial markets - something is ONLY worth what someone else is willing to pay for it.

So until you actually have someone pay for it - any "price" anyone tosses out is just an opinion - unless that "anyone" is an actual buyer.

My point was simply that your figure of 100 billion is also that - an opinion - until another party actually does annouce a bid and we see the subsequent market reaction AND we see the deal close, its really just a rough guess.

Originally Posted by 9000

My apology if the word 'assume' provoked you, but you really assumed too much in the reply. Say, you assumed the total market value equals to the total stock values in a single exchange market, aka NYSE.

But it's good that you bought up the term premium. The total market value is what used to determine the premium over present stock value. The term premium is actually a laymen term in acquisition for media annoucement, because all the public would care is how much their share and options would worth during the acqusition. However, only the actually amount dealt matters for the parties involved in the acquisition, rather than the current stock values, because if they chose to perform M&A, they wouldn't be interested in buying stock via free exchange channel, unless a huge amount of convertible stocks is involved in the deal.

Also, you assumed I read the 2007 report. Well, we can't discuss if you assumed too much okay?

Originally Posted by cBeam

Please re-read what you wrote and edit, there are statements in your post that make no sense at all and are plain wrong.

Please familiarize yourself with the term "outstanding shares", as you apparently think that market cap is share price times shares traded on one exchange (NYSE). This is clearly not the case, however you bring this up a second time. To reiterate: Market cap is share price times outstanding shares (3.71 billion shares according to Nokia's latest quarterly report).

I did not assume you read a 2007 report, I asked the question if you did, as it would have been the only plausible explanation to value Nokia at EUR 100 billion. So, was the report from 2007 or did you find a 2011 report valuing Nokia at EUR 100 billion?

To assign Nokia a current value of EUR 100 billion / $144 billion is not plausible. Neither market cap, break up value or liquidation value are anywhere close to this number.

It would be good if you could provide the issuer / name of the European financial report you refer to that - according to you - assigns an EUR 100 billion valuation to Nokia. I would like to get my hands on that report, if one exists at all.

Originally Posted by 9000

Do you own Nokia's stocks?

Originally Posted by cBeam

Would you please be so nice to disclose who issued / wrote the report you referred to in a previous post? The one that values NOK at EUR 100 billion.
Thanks in advance...