LocalTechWire’s The Skinny highlights the fact Nortel shares have jumped 30% since its reverse-stock split (10 for 1). While The Skinny concludes the stock is “no longer a dog”, analysts appear to be unenthusiastic with 24 of 33 surveyed by Thomson/First Call calling it a “hold”, while only six call it a “buy” and two a “strong buy”.
Obviously, the Ethernet supply deal with BT, which was recently announced, is a key factor but you have to wonder what else investors are excited about when it comes to Nortel. Are they finally buying into CEO Mike Zafirovski’s plan to restructure the company so it can become a leaner, more focused entity? Do they think partnerships with high-profile firms such as Microsoft and LG are going to Nortel an edge within a highly-competitive industry? And/or is Nortel stock just cheap compared with its telecom equipment peers.
More: Speaking of telecom equipment makers, Motorola is slashing 3,500 jobs, or 5% of its workforce, to reduce operating costs in the wake of disappointing fourth-quarter results. The company said the job cuts will save its about $400-million over the next two years.