Just looked at the financials on their website.
Market cap is about $6.7B. Cash position $1.8B. Cash and equivalents $11B. Revenue 2011 $47B.
OK, they currently have a negative cash flow, but it does not seem significant enough to warrant this low valuation.
I have been burned by Ericsson a few years ago, so I know how low things can go, but even Ericsson has a market cap of over $25B nowadays.
What am I missing?
In 2000, Nokia was at $58.50
In 2001, Nokia was $42
In 2007, Nokia was at $39
In 2009 it was $15.70
In 2010 it was at $10
In October 2011 it was $7.18
In February of this year it was $5.80
In April it was $4
In May it was $3
On July 5th it was still above $2
During this entire slide, people have been saying Nokia is undervalued and tried to catch the falling knife.
Between May and early this month, when Nokia was between $2 and $2.99, it seems there was a flood of people coming in thinking Nokia was undervalued. Well where is the person who bought Nokia at $2.95 on May 29th, a month and a half ago? They've lost 42% of their investment. A lot of those types of people now feel they made a mistake and are selling, causing the stock to spiral down even more.
In February, I wrote on these message boards Nokia should put out a line of Android phones, just like the other successful non-Apple smartphone makers do (Samsung, HTC...) Five months later Nokia hasn't given any indication they will be doing this. Even if they did plan to do it their financials would be shaky, but at least they'd have hope. Currently they have no hope. Nokia is in a shrinking market pool (Windows Phone), and even in that ecosystem is surpassed by Samsung and HTC.
Facebook is going to be introducing a smartphone to compete against Google. Nokia maybe brought out to do this! Facebook has the cash since the IPO and could do it with still having 80% of the cash left to do other things.
Windows Phone is not shrinking at all; and the new Windows Phone V.8 is going to capture significant market share. I know you Apple & Google fans like to write off Microsoft, but the evil empire isn't dead yet ;o)
Nokia will be back in October, with a slew of awesome Windows V.8 phones. Stock will rise higher, so buy now.
burning cash, making pretty cell phones that will be out dated in 3 months and with microsoft
I wouldn't mind buying a cash burning company if they had a future. Now the future looks bleek. Windows mango was supposed to be the saviour but it turns out in 3 months it is going to be windows 8. I don't think so.
Android and iOS are going at light speed with upgrades and innovations. Windows will be outdated in 2 months after its release!
NOK has to adopt android today! to have a chance by next spring.
I would have considered buying their beautiful phone with android over my samsung galaxy S2.
The stock will go down to $1
i can say most of end users don't care if their device can be upgraded or not if the device can handle their jogs well. All the technology stuffs have changes after a period of time. manufacturers push new model out every year. Who needs all the devices to be updated. I just buy TV 2 years ago and TV guys launch new model every year. I am pretty enjoying my TV still now. I have my 2010 BMW and enjoy it a lot.
This has nothing to do with the ADR. You can do the same math with the share price in Helsinki.
All I am saying is that you can currently by cash and equivalents of $11B for almost half of that. I don't understand why anyone would NOT want to do that ...