Nokia is burning a billion per year. The question is: Can they make enough to support that level of cash burn. If the 920 does not come through, what else do they have? Patent rights and phone sales will bring in maybe 600m. Where will the additional 400m come from?
First of all, Nokia has been massively cutting costs since earlier in the year. Google the Yahoo article "Analysts upgrade Nokia on cost-cutting plans" from June 15. According to that article the cuts will save $2.0B by the end of 2013. There's your billion a year right there.
Second, Nokia is cutting advertising costs by using MSFT to market the windows phone. Its worked pretty effectively considering they're sold out everywhere.
Also, you say ALL phones would increase by 600m (plus patents?) The Lumia 920 should bring in a billion in revenue by itself and that's just over the last few weeks. But, you're not even considering the other phones (the 920 is not the only phone NOK makes) especially in developing countries. Nokia is specifically targeting the huge growth in the industry in developing areas. I don't see any reason why phones by themselves can't generate an extra billion in profit a year. Actually, I expect it to be much more than that.
Also, you say patents 600M ? The RIMM royalties should make a pretty big dent in that 600M by itself. Some people have said its in the hundreds of millions a year not counting the retroactive payments. Not to mention the APPL settlement. It appears to me that NOK has been much more aggressive in pursuing patent lawsuits in the last year. That should increase by quite a bit maybe even covering 600M by itself.
And we haven't even talked about Nokia-Siemens Networks which was losing money last year but is profitable this year. Check out the Forbe article "Nokia Can Dial Up $4.50 As LTE Transition Helps NSN Stage Recovery" from earlier today.
Lastly, NOK has a current ratio of 1.28. Meaning their current assets are enough to cover their current liabilities. I don't see them going out of business anytime soon.
I honestly don't see how you're drawing the conclusions you are.
Sentiment: Strong Buy
You shorting genius about to be wiped out and it will happen in one day, can you guess which? By the way the 400 mil plus some more will come from "innovative" Apple. You steal you pay. is that why all the parasites want to get rid of Nokia. It's a reminder of their criminality-wipe out the victim of a crime and slowly people tend to forget about it. Great, just like in all the Hollywood crime movies. Seriously cover your #$%$, the bad news for shorts will come out and that will be Armaggedon day. Pay a little attention to the actual news out there not the crappola generated by paid wall street stooges. LOL
You have lost our credibility when you make statements like you did.
I will be putting you on ignore even though you might have something relevant to say
Advice think before you spout off!
Peashooter. We want all people to have the ability to own a Nokia not merely republicans or democrats. If you a republican, do yourself a service and be educated and act as an example.
Good luck to all longs and my hope for the shorts to feel some pressure this week is not happening but hopefully soon.
PS. Love my Lumia 920s.
Sentiment: Strong Buy
I think that just because a person asks a legitimate question that he does not need to be slammed. I am long NOK and holding, but I also owned Lucent and Nortel which Cramer talked about as their patents were by passed by new technology which wiped out the book value. He said the same could happen to NOK. I think he is a blow hard, but I lost all my investment in NT and LU. Hopefully NOK works out, but I do not want to be an emotional investor who "loves" a stock. GLTA to longs
Nice post and you are correct. The many concerns have been posted over and over. People on this board don't like to hear someones take unless agrees with theirs. My guess is that they are simply angry and sitting on mounds of losses.
Crammer is a blow hard and a bandwagon kind of guys, but in the end, this is an easy call for him to make, because of the massive amount of negatives piled up against Nokia. The patent argument is laughable. You cannot invest because you think patents will save you if your speculation is wrong. You invest because you think they can out sell the next guy. If they cannot, it does not matter how many patents or cash or anything else they have. They have to win consumers hearts and minds and they are not doing it.