One For You and Ten for Nortel

Nortel has implemented its plan to consolidate its stock on a 1 for 10 basis so instead of a Carl Sagan-like public float of billions and billions of shares (actually 4.3 billion), there will now be only 433 million shares. Nortel shares opened at $24.40 in Toronto – a level not seen for a few years. “True shareholder value will be driven by ongoing progress and company performance, but this step helps create a better foundation on which to build,” Peter Currie, Nortel’s executive vice-president and chief financial officer, said earlier this year.

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2 Responses to “One For You and Ten for Nortel”

  1. Observer Says:

    Currie’s punch line of “shareholder value will be driven by progress” is reflected by ongoing yearly lows. He was also funny when he said to “draw your own conclusions” to so many people abruptly leaving too. Like how the hell do we know why with their transparency and credibility. They are lucky they still trade.

    In between the traditional hype, CEO more recently admits he is dissapointed with progress /margins, understandibly. Its is what lies inbetween the hype we must pay closer attention to like rocky roads ahead, tall mountains to climb, no miracles, etc… as they shrink and lose money while others merge. We see their orders, partnerships, outlook, gambles, all failing on their way to zero as they exhaust assets, sell business, print paper, etc., with so much more to come.

    The question of why they implemented a reverse split now that they mensioned years ago remains suspect. I am suprised their claim to draw investment hasn’t been criticized further. Reverse splits don’t do shareholder’s any favours and are generally utilized by companies in trouble.

    We have seen ongoing disregard contradicting “fair” settlement with revisions adding an unprecdented no guarantees as creditors increased collateralization.

    Currie warned us early on they may refinance through the open markets than equity finance and they did with $2B in high risk/yeild bonds to further burden already negative cash flow after creditors increased cash collateralization 50% to $1.5B . (bonds that have since, and now, require pensions be specifically listed, of which they have the highest pension deficit in Canada now that Alcan has cleared itself.

    This is a company who neared insolvency once with less woes, posted the greatest Candian loss in history like Enron did in the US, who made one of the worlds largest frauds, like Enron/Worldcom, and was one of the highest traded on the exchanges. Now it holds the markets and shareholders hostage in this settlement they went on to tank tanked with a whopping 1.4B in revisions they intially downplayed. They even still keep bonuses with a reluctance to chase past officers for an added punch line. What is this?

    It appears they care little about shareholders short of maintining a their dilution pool with this reverse split. If it wern’t for hiding under safe harbor, their recent revisions should make them prime candidates for a further lawsuit to surely shut their doors this time. Where are the SEC fines too? Who guarantees what we invest in is not lies for theft. the dmage to some thwarts any violent home invasion you can be sure, why is white collar crime treted so disspasionately backed with ecoonmic, political, and legal power to the disadvantage of the greater numbers in victims/little guys .

    Still no credibility there. Look at ethical Gary slandered, unethical green CEOs who defrauds from day one and get lotteries, endless ploys to date with so much dispassionate commentary as they finance themselves to zero, master of loopholes, delay, and ambigiuity.

    If they formally approve the settlement in principal accepting futher revisions that tanked it, I feel they will have harlet capital foresaking principal. The SEC shouldn’t be shy about crippling the company in light of its delays and false numbers submitted down to deadlines.

    Nothing has changed and my reiterations of disgust are an astounding understatement in how they can continue to operate.

    Honest sales is what they need, not finangling and ongoing ploys by a top heavy management riding on the backs of their engineers, exporting jobs, firing them, or cutting their pension benefits. The more they pay themselves the more the company loses it seems, contrary to performace based management working in anyones interest beyond theirs.

    This reverse split is only another desperate move in the saga… with so much more to come.

  2. Bill Ritchie. Says:

    By Bill Ritchie on Wed 06 Dec 2006 10:35 PM EST | Permanent Link

    Nortel has just blown me and all other investors like me out of the water!
    I purchased Nortel com.shares for $117.each just before the “crash” I tried to sell but the lines were forever busy at the CIBC traders desk in Toronto. So I suffered a loss by keeping the 350 shares. I bought their shares again at around $30.per share, as there was a “short lived” upward movement but it continued to drop down to 50 cents a share!. By this time I have thrown my hands up and hoped for the best!!
    I was trying to position my investment with Nortel into a more reasonable position for future recovery some years down the road!
    I now hold 70 shs ( was 700 shs until the reversed split— effective December 1st., 2006.)
    My financial plan has now been “blown apart” with the introduction of the “one for 10 shares”
    This new arrangement means that Nortel’s stock would have to go up to $600.per share for me to recover my $42,000 investment!
    I am sure there are thousands of “small” investors out there that are in the same boat as myself. You thought the same as I did and have reinvested in Nortel as I did in order to recover your losses eventually.
    Well that is NOT going to happen within anyone’s life time.
    There is no other alternative but to sue Nortel for an out-of-court settlement and the sooner the better.
    If you wish to join me you can e-mail me at:

    cwritchie@cogeco.ca

    Anyone else wanting to participate in this discussion or has any other ideas on what to do, please reply here.
    Thank you for reading this investor’s story about investing in our Canadian Corporation called — NORTEL!
    Reply

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