Microsoft's financial, accounting and legal troops are presumably all over the books and records of Nokia's devices and services business.
Today, the financial press carried the parallel story about the surviving Nokia ADR (NOK), with an equity market capitalization of $28 billion and a price of $7.53. A new CEO, Rajeev Suri, was also announced.
Although I am sure that Mr.Suri has a bold vision for the company, it's hard to contemplate public investor interest in the company, looking to the future.
According to the report in the New York Times, Nokia will receive some $7.5 billion from Microsoft for the sale of its handset and services business. At the same time, Nokia announced that it plans to spend some $6.9 billion to pay down debt, issue special dividends to shareholders, and to buy back its shares. The pay down debt part, I can understand.
Why would the company in its current condition be interested in hewing to the classical activist shareholder agenda of dividends and share buybacks when the company's future seems so vague?
In addition to owning what was the 50% stake of Siemens in the former Nokia-Siemens wireless network infrastructure business, Nokia plans to make this expanded business one of the future pillars of the company. Equipment, generally, hasn't been the place to be in the IT/Communications space.
The second pillar of the future business will be research and development, including the development and monetization of the IP portfolio. Again, how can an investor value this opportunity?
It wasn't that long ago that Nokia was being touted in magazines like Wired and glossy tech rags as the next Microsoft, Cisco, yada yada. Oy, was that a bad forecast!
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment