how Steve Elop and the Board could make the management decision to build and market the Lumia phone series in late 2011 and early 2012 that would not be upgradeable to a Windows 8 phone level that is due out in Q3/4 of 2012. With the revenue going off a cliff and Q1/2 horrible cash flow numbers, how do you make the collective decision that you can sell such a phone to consumers and get the revenue numbers up rapidly to address a deadly cash flow drain? How does one make that decision?
And, perhaps, with no additional revenue stream from a tablet product.
There are two possible answers here. Either there is a viable master plan shareholders are not aware of or the Board has decided it can't make it as a continuing business entity given the pace of very strong competition and the time that has been lost. So, the decision has been made to restructure and sell. With MSFT's new proclivity to enter the hardware world, it's not far fetched to believe that a buyout price of $2 or so has been agreed to and the movement toward that price is underway.
If the final Q2 numbers don't drive the current price down to $2, the Q3 numbers, with horrible revenue and cash flow numbers will.
That is the only scenario that makes any sense -- as you look at the strategic decisions made to date. The Lumia 900 could have been built to be upgradeable with Windows 8 this fall.
The Finn's will not sell at below book value. I believe people that have information about Microsft's plan are buying now (Finn's banks and pension fund? )
Consider how strange it is for Nokia to pay 8 percent dividend last month. It may be a decision to generate cash so that (informed) stockholders may use it to buy more stock.
Microsoft-Nokia most likely will underwrite Nokia's WP8 launch. In the failed 2010 Kin1 and Kin2 launch, Microsoft footed close to $1B bill for unsold inventory. This WP8 launch is many times bigger than the Kin launch. It is all Microsoft's plan (to tie WP8 to Windows, launch in 180 countries 50 languages, make its own tablet etc.). Nokia will have some skin in the launch, but no reason to take bigger risks than than HP, Acer, Asus, and other Microsoft partners.
yup,,,its like a conspiracy between 2 former MS execs that secretly plotted to gain nokia hardware knowhow for their real co microsoft by infiltrating nokia and then getting a contract and now hanging nokia out to dry. Dastardly,
Skullduggery,,,and our money they take.
NSN is been bleeding cash almost every quarter since creation, Nokia wanted to do an IPO with it but they need to be profitable or at least cash flow positive to do so, so i think they scrapped that idea at least for now at some point last year.
No one is willing to buy NSN, may end up being a good investment in the future but NOK can not afford to dump another 500 million euros along with Siemens in it like they did in 2011.
Just another reason why the stock is at $2 and change.
Value of patents alone = min 2.43/share IMO.
Royalty income = 600m /yr.
NOKIA says royalty income will increase.
Lets assume 600m for valuation.
Use P/E = 15, 15 x 600m = 9 billion value to patents
Use P/E = 20, 20 x 600m = 12 billion value to patents
3.71 billion shares outstanding.
9/3.71 = 2.43/share
12/3.71 = 3.23/share.
We are not including NET CASH, NAVTEQ mapping, Nokia-Siemens Networks.
I am not worried about stock price at this point. Stock is trading below liquidation vallue.
Bad qtrs priced in.
It is possible NOKIA gets taken out, however it will be taken out above $5/share.
I LOVE MY NOKIA!!
is android next version is upgradable. i doubted.
are u happy with current android. i guess lots of android user say yes. i am pretty sure nokia user with current os will say yes. as long as u can run all the application u want then who cares what ur os is. this kind of talk dont make sense to me other than create panic among stock holders who may not even have nokia.
It's a tough mountain to climb to ask a marketing/sales team to sell to a consumer a product he/she knows will be substandard in a few months. Especially from a company he/she knows is financially at risk as a business. Typically, the consumer will move to a competitor's product or wait. Consumers waiting is not good for NOK in its current financial situation.
On the buyout price assessment, if you add a premium of say 33% to a $2 stock price, you have a $10B market cap. The patent portfolio may be valued at around 6 or 7B. The NSM is a losing enterprise because of the difficult Chinese/ALU/ERIC competition. They've been trying to sell it -- but no buyers. Not sure what the mapping orgn is valued at or the other organic functions, but they are probably within the balance of the market cap of $11B.
It's easy to see why a $2 share price becomes a doable starting point for a buyout.
It's enough to make a person cry.
>If the final Q2 numbers don't drive the current price down to $2, the Q3 numbers, with horrible revenue and cash flow numbers will.<
Certainly could happen. But you don't believe that would be the buyout price? Or do you? The patents should fetch that alone.
What's the rest worth to MSFT less NSN?
Agreed, I really want there to be some kind of secret that we don't know about, but all I can see is failure and inability to control their (Nokia's) own fate.
It seems to me that they couldn't get their teams to really focus on Lumia, nor are Microsoft a loyal partner. Microsoft seem like they just see Nokia as a 'fan' and 'good customer' rather than a real partner.
In my opinion, the 808 is the product of teams that refused to let go and focus on Windows phone. It feels like the exec team compromised and allowed the teams behind this phone to continue in the hope that they'd eventually get behind Lumia.
The biggest issue in my mind is that the teams at Nokia feel like they are on a sinking ship, on a mission they don't believe in ... and failure is a product of their own belief that they can't be successful.
It feels like there HAS to be something they are working on that is amazing, but I think the reality is they have been spinning their wheels and continue to fall behind the competition. I think the whole spiel about 'Mango was done when we signed the agreement' is going to turn into ... 'well, we don't want to degrade the windows ecosystem'. Nokia ... you NEED some competitive advantage that others can't match, you DESERVE it because of your early and wholehearted commit to Windows phone ... it feels like Nokia's partnership with Microsoft is one-way, with Microsoft sucking Nokia dry.
I think 808 is a new technology so they sell it on Symbian for a test run.
Improved versions of hardware and software will launch after WP8. No new models for WP7.5 before end of the year anyway.