So Nortel is thinking about a reverse stock split, which makes sense when you have nearly FIVE BILLION shares outstanding and stock option programs that provide senior executives with ways to get their hands on millions of shares. This isn’t the first time Nortel has raised the idea of a stock split reversal – the idea came up a few years ago when the stock fell below $1 and the NYSE contemplated a review of Nortel’s listing. While a stock split is a logical thing to consider, it’s not the best PR move given management should probably be more focused on fixing operations and doing things to gain some strategic momentum. Orion Securities analyst Duncan Stewart expects Nortel will probably want to do a one-to-five or one-to-10 reversal given shareholders gave the the board authorization in 2003 to pursue this kind of consolidation. He said Nortel will be aware of Agere’s recent move, which saw its share consolidated at $12 – only to see them drop back into single-digits soon afterwards.
Nortel Stock Split Reversal